Published: 2023-05-04 00:00:00 ET

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission File Number: 001-37979

 

VERRA MOBILITY CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware		81-3563824
(State of		(I.R.S. Employer
Incorporation)		Identification No.)
1150 North Alma School Road		85201
Mesa, Arizona		(Zip Code)
(Address of Principal Executive Offices)

(480) 443-7000

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

(Title of Each Class)		(Trading Symbol)		(Name of Each Exchange on Which Registered)
Class A Common Stock, par value $0.0001 per share		VRRM		Nasdaq Capital Market
Warrants to purchase Class A Common Stock		VRRMW		OTC Pink Marketplace

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act:

 

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company	☐
			Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). YES ☐ NO ☒

As of May 1, 2023, there were 150,391,591 shares of the Company’s Class A Common Stock, par value $0.0001 per share, issued and outstanding.

 

 

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VERRA MOBILITY CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2023

TABLE OF CONTENTS

 

PART I—FINANCIAL INFORMATION		5
Item 1. Financial Statements		5
Condensed Consolidated Balance Sheets		5
Condensed Consolidated Statements of Operations and Comprehensive Income		6
Condensed Consolidated Statements of Stockholders’ Equity		7
Condensed Consolidated Statements of Cash Flows		8
Notes to the Condensed Consolidated Financial Statements		10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		30
Item 3. Quantitative and Qualitative Disclosures About Market Risk		38
Item 4. Controls and Procedures		38
PART II—OTHER INFORMATION		39
Item 1. Legal Proceedings		39
Item 1A. Risk Factors		39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		39
Item 3. Defaults Upon Senior Securities		39
Item 4. Mine Safety Disclosures		39
Item 5. Other Information		39
Item 6. Exhibits		40
SIGNATURES		42

 

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of federal securities laws. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, products, services, and technology offerings, market conditions, growth and trends, expansion plans and opportunities, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “preliminary,” “likely” and similar expressions, and the negative of these expressions, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements include, among other things:

You should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or events and circumstances reflected in the forward-looking statements will occur. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or revised expectations.

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Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, are available free of charge on our website, verramobility.com, under the heading “Investors” immediately after they are filed with, or furnished to, the SEC. We use our Investor Relations website, ir.verramobility.com, as a means of disclosing information, which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media. Information contained on or accessible through, including any reports available on, our website is not a part of, and is not incorporated by reference into, this Quarterly Report on Form 10-Q or any other report or document we file with the SEC. Any reference to our website in this Form 10-Q is intended to be an inactive textual reference only.

Unless the context indicates otherwise, the terms “Verra Mobility,” the “Company,” “we,” “us,” and “our” as used in this Quarterly Report on Form 10-Q refer to Verra Mobility Corporation, a Delaware corporation, and its subsidiaries taken as a whole.

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Part I—Financial Information

Item 1. Financial Statements

VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

($ in thousands, except per share data)		March 31, 2023				December 31, 2022
Assets
Current assets:
Cash and cash equivalents		$	64,267			$	105,204
Restricted cash			3,550				3,911
Accounts receivable (net of allowance for credit losses of $16.5 million and $15.9 million at March 31, 2023 and December 31, 2022, respectively)			178,251				163,786
Unbilled receivables			34,184				30,782
Inventory			18,923				19,307
Prepaid expenses and other current assets			33,258				39,604
Total current assets			332,433				362,594
Installation and service parts, net			26,481				22,923
Property and equipment, net			111,376				109,775
Operating lease assets			38,012				37,593
Intangible assets, net			355,678				377,420
Goodwill			834,299				833,480
Other non-current assets			12,612				12,484
Total assets		$	1,710,891			$	1,756,269
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	71,475			$	79,869
Deferred revenue			31,105				31,164
Accrued liabilities			52,044				48,847
Tax receivable agreement liability, current portion			4,994				4,994
Current portion of long-term debt			9,019				21,935
Total current liabilities			168,637				186,809
Long-term debt, net of current portion			1,140,712				1,190,045
Operating lease liabilities, net of current portion			33,338				33,362
Tax receivable agreement liability, net of current portion			50,900				50,900
Private placement warrant liabilities			38,667				24,066
Asset retirement obligations			13,411				12,993
Deferred tax liabilities, net			20,920				21,149
Other long-term liabilities			7,198				5,875
Total liabilities			1,473,783				1,525,199
Commitments and contingencies (Note 13)
Stockholders' equity
Preferred stock, $0.0001 par value			—				—
Common stock, $0.0001 par value			15				15
Common stock contingent consideration			36,575				36,575
Additional paid-in capital			306,974				305,423
Accumulated deficit			(93,501	)			(98,078	)
Accumulated other comprehensive loss			(12,955	)			(12,865	)
Total stockholders' equity			237,108				231,070
Total liabilities and stockholders' equity		$	1,710,891			$	1,756,269

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(Unaudited)

 

		Three Months Ended March 31,
($ in thousands, except per share data)		2023				2022
Service revenue		$	184,698			$	161,134
Product sales			7,205				9,251
Total revenue			191,903				170,385
Cost of service revenue			4,230				3,779
Cost of product sales			5,383				5,995
Operating expenses			61,843				51,063
Selling, general and administrative expenses			40,013				41,635
Depreciation, amortization and (gain) loss on disposal of assets, net			30,333				35,907
Total costs and expenses			141,802				138,379
Income from operations			50,101				32,006
Interest expense, net			22,687				14,279
Change in fair value of private placement warrants			14,601				3,734
Loss on interest rate swap			2,798				—
Loss on extinguishment of debt			1,349				—
Other income, net			(3,756	)			(2,866	)
Total other expenses			37,679				15,147
Income before income taxes			12,422				16,859
Income tax provision			7,845				6,819
Net income		$	4,577			$	10,040
Other comprehensive (loss) income:
Change in foreign currency translation adjustment			(90	)			2,708
Total comprehensive income		$	4,487			$	12,748
Net income per share:
Basic		$	0.03			$	0.06
Diluted		$	0.03			$	0.06
Weighted average shares outstanding:
Basic			149,165				156,130
Diluted			153,129				160,749

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

For the Three Months Ended March 31, 2023
		Common Stock								Common Stock Contingent				Additional Paid-in				Accumulated				Accumulated Other Comprehensive				Total Stockholders'
(In thousands)		Shares				Amount				Consideration				Capital				Deficit				Loss				Equity
Balance as of December 31, 2022			148,962			$	15			$	36,575			$	305,423			$	(98,078	)		$	(12,865	)		$	231,070
Net income			—				—				—				—				4,577				—				4,577
Vesting of restricted stock units ("RSUs") and performance share units ("PSUs")			313				—				—				—				—				—				—
Exercise of stock options			53				—				—				699				—				—				699
Payment of employee tax withholding related to RSUs and PSUs vesting			—				—				—				(2,526	)			—				—				(2,526	)
Exercise of public warrants			633				—				—				—				—				—				—
Stock-based compensation			—				—				—				3,378				—				—				3,378
Other comprehensive loss, net of tax			—				—				—				—				—				(90	)			(90	)
Balance as of March 31, 2023			149,961			$	15			$	36,575			$	306,974			$	(93,501	)		$	(12,955	)		$	237,108
For the Three Months Ended March 31, 2022
Balance as of December 31, 2021			156,079			$	16			$	36,575			$	309,883			$	(81,416	)		$	(5,094	)		$	259,964
Net income			—				—				—				—				10,040				—				10,040
Vesting of RSUs			154				—				—				—				—				—				—
Exercise of stock options			7				—				—				93				—				—				93
Payment of employee tax withholding related to RSUs vesting			—				—				—				(1,436	)			—				—				(1,436	)
Stock-based compensation			—				—				—				4,446				—				—				4,446
Other comprehensive income, net of tax			—				—				—				—				—				2,708				2,708
Balance as of March 31, 2022			156,240			$	16			$	36,575			$	312,986			$	(71,376	)		$	(2,386	)		$	275,815

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

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VERRA MOBILITY CORPORATION

condensed consolidated Statements of Cash Flows

(Unaudited)

 

		Three Months Ended March 31,
($ in thousands)		2023				2022
Cash Flows from Operating Activities:
Net income		$	4,577			$	10,040
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			30,309				35,675
Amortization of deferred financing costs and discounts			1,277				1,306
Change in fair value of private placement warrants			14,601				3,734
Loss on interest rate swap			1,552				—
Loss on extinguishment of debt			1,349				—
Credit loss expense			1,697				3,505
Deferred income taxes			(2,249	)			(18,771	)
Stock-based compensation			3,378				4,446
Other			8				354
Changes in operating assets and liabilities:
Accounts receivable			(16,222	)			(14,300	)
Unbilled receivables			(3,464	)			(10,265	)
Inventory			180				(5,722	)
Prepaid expenses and other assets			6,232				8,235
Deferred revenue			95				46
Accounts payable and other current liabilities			(4,291	)			(477	)
Other liabilities			6,188				13,441
Net cash provided by operating activities			45,217				31,247
Cash Flows from Investing Activities:
Payment of contingent consideration			—				(412	)
Payments for interest rate swap			(1,246	)			—
Purchases of installation and service parts and property and equipment			(18,372	)			(11,478	)
Cash proceeds from the sale of assets			34				25
Net cash used in investing activities			(19,584	)			(11,865	)
Cash Flows from Financing Activities:
Repayment on the revolver			—				(25,000	)
Repayment of long-term debt			(64,755	)			(2,255	)
Payment of debt issuance costs			(44	)			(54	)
Proceeds from the exercise of stock options			699				93
Payment of employee tax withholding related to RSUs and PSUs vesting			(2,526	)			(1,436	)
Net cash used in financing activities			(66,626	)			(28,652	)
Effect of exchange rate changes on cash and cash equivalents			(305	)			2,231
Net decrease in cash, cash equivalents and restricted cash			(41,298	)			(7,039	)
Cash, cash equivalents and restricted cash - beginning of period			109,115				104,432
Cash, cash equivalents and restricted cash - end of period		$	67,817			$	97,393

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

 

 

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VERRA MOBILITY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

 

		Three Months Ended March 31,
		2023				2022
Supplemental cash flow information:
Interest paid		$	17,064			$	8,188
Income taxes paid, net of refunds			2,631				1,147
Supplemental non-cash investing and financing activities:
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at period-end			5,179				4,057

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

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VERRA MOBILITY CORPORATION

Notes to the CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

4. Goodwill and Intangible Assets

 

5. Accrued Liabilities

 

6. Long-term Debt

9. Income Taxes

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read together with our Annual Report on Form 10-K for the year ended December 31, 2022, and our financial statements included in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. Please also refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Business Overview

We are a leading provider of smart mobility technology solutions 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 fleet owners such as rental car companies (“RACs”) and fleet management companies (“FMCs”), governments, universities, healthcare facilities, commercial parking operators and other violation-issuing authorities. Our vision is to develop and use technology and data intelligence to make transportation safer, smarter and more connected.

Executive Summary

We operate under long-term contracts and a highly reoccurring service revenue model. We continue to execute our strategy to grow revenue organically and expand offerings into adjacent markets through innovation or acquisition. During the periods presented, we:

Segment Information

We have three operating and reportable segments, Commercial Services, Government Solutions and Parking Solutions:

Segment performance is based on revenues and income from operations before depreciation, amortization, and stock-based compensation. The measure also excludes interest expense, net, income taxes and certain other transactions and is inclusive of other income, net.

During the third quarter of 2022, we changed our measure of segment profit to include loss on disposal of assets, net, and to exclude transaction and transformation expenses that were previously included within the selling, general and administrative

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expenses and other income, net line items. The comparable prior period has been recast to conform to the revised presentation, although the impact of this revision to previously reported segment profit was not material. See Note 14, Segment Reporting.

Primary Components of Our Operating Results

Revenues

Service Revenue. Our Commercial Services segment generates service revenue primarily through the operation and management of tolling programs and processing violations for RACs, FMCs and other large fleet customers. These solutions are full-service offerings by which we enroll the license plates of our customers’ vehicles and transponders with tolling authority accounts, pay tolls and violations on the customers’ behalf and, through proprietary technology, integrate with customer data to match the toll or violation to the driver and then bill the driver (or our customer, as applicable) for use of the service. The cost of certain tolls, violations and our customers’ share of administration fees are netted against revenue. We also generate service revenue in our Commercial Services segment through processing titles and registrations.

Our Government Solutions segment generates service revenue through the operation and maintenance of photo enforcement systems. Revenue drivers in this segment include the number of systems installed and the monthly revenue per system. Ancillary service revenue is generated in our Government Solutions segment from payment processing, pass-through fees for collection expense, and other fees.

Our Parking Solutions segment generates service revenue mainly from offering software as a service, subscription fees, professional services and citation processing services related to parking management solutions to its customers.

Product Sales. Product sales are generated by the sale of photo enforcement equipment in the Government Solutions segment and specialized hardware in the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.

Costs and Expenses

Cost of Service Revenue. Cost of service revenue consists of recurring service costs, collection and other third-party costs in our segments.

Cost of Product Sales. Cost of product sales consists of the cost to acquire and install photo enforcement equipment purchased by Government Solutions customers and costs to develop and install hardware sold to Parking Solutions customers.

Operating Expenses. Operating expenses primarily include payroll and payroll-related costs (including stock-based compensation), subcontractor costs, payment processing and other operational costs, including print, postage and communication costs.

Selling, General and Administrative Expenses. Selling, general and administrative expenses include payroll and payroll-related costs (including stock-based compensation), real estate lease expense, insurance costs, professional services fees, acquisition costs and general corporate expenses.

Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net includes depreciation on property, plant and equipment, and amortization of definite-lived intangible assets. This line item also includes any one-time gains or losses incurred in connection with the disposal of certain assets.

Interest Expense, Net. This includes interest expense and amortization of deferred financing costs and discounts and is net of interest income.

Change in Fair Value of Private Placement Warrants. Change in fair value of private placement warrants consists of liability adjustments related to the 6,666,666 Private Placement Warrants originally issued to Gores Sponsor II, LLC re-measured to fair value at the end of each reporting period.

Loss on Interest Rate Swap. Loss on interest rate swap relates to the loss associated with the derivative instrument re-measured to fair value at the end of the reporting period and the related periodic cash payments.

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Loss on Extinguishment of Debt. Loss on extinguishment of debt consists of the write-off of pre-existing original issue discounts and deferred financing costs associated with debt extinguishment.

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.

Results of Operations

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

The following table sets forth our statements of operations data and expresses each item as a percentage of total revenue for the periods presented as well as the changes between periods. The tables and information provided in this section were derived from exact numbers and may have immaterial rounding differences.

		Three Months Ended March 31,
										Percentage of Revenue								Increase (Decrease)  2023 vs 2022
($ in thousands)		2023				2022				2023				2022				$				%
Service revenue		$	184,698			$	161,134				96.2	%			94.6	%		$	23,564				14.6	%
Product sales			7,205				9,251				3.8	%			5.4	%			(2,046	)			(22.1	)%
Total revenue			191,903				170,385				100.0	%			100.0	%			21,518				12.6	%
Cost of service revenue			4,230				3,779				2.2	%			2.2	%			451				11.9	%
Cost of product sales			5,383				5,995				2.8	%			3.5	%			(612	)			(10.2	)%
Operating expenses			61,843				51,063				32.2	%			30.0	%			10,780				21.1	%
Selling, general and administrative expenses			40,013				41,635				20.9	%			24.4	%			(1,622	)			(3.9	)%
Depreciation, amortization and (gain) loss on disposal of assets, net			30,333				35,907				15.8	%			21.1	%			(5,574	)			(15.5	)%
Total costs and expenses			141,802				138,379				73.9	%			81.2	%			3,423				2.5	%
Income from operations			50,101				32,006				26.1	%			18.8	%			18,095				56.5	%
Interest expense, net			22,687				14,279				11.8	%			8.4	%			8,408				58.9	%
Change in fair value of private placement warrants			14,601				3,734				7.6	%			2.2	%			10,867				291.0	%
Loss on interest rate swap			2,798				—				1.5	%			—				2,798			n/a
Loss on extinguishment of debt			1,349				—				0.7	%			—				1,349			n/a
Other income, net			(3,756	)			(2,866	)			(2.0	)%			(1.7	)%			(890	)			31.1	%
Total other expenses			37,679				15,147				19.6	%			8.9	%			22,532				148.8	%
Income before income taxes			12,422				16,859				6.5	%			9.9	%			(4,437	)			(26.3	)%
Income tax provision			7,845				6,819				4.1	%			4.0	%			1,026				15.0	%
Net income		$	4,577			$	10,040				2.4	%			5.9	%		$	(5,463	)			(54.4	)%

 

Service Revenue. Service revenue increased by $23.6 million, or 14.6%, to $184.7 million for the three months ended March 31, 2023 from $161.1 million for the three months ended March 31, 2022, representing 96.2% and 94.6% of total revenue, respectively. The following table depicts service revenue by segment:

 

		Three Months Ended March 31,
										Percentage of Revenue								Increase (Decrease)  2023 vs 2022
($ in thousands)		2023				2022				2023				2022				$				%
Service revenue
Commercial Services		$	85,639			$	73,465				44.6	%			43.1	%		$	12,174				16.6	%
Government Solutions			83,233				73,224				43.4	%			43.0	%			10,009				13.7	%
Parking Solutions			15,826				14,445				8.2	%			8.5	%			1,381				9.6	%
Total service revenue		$	184,698			$	161,134				96.2	%			94.6	%		$	23,564				14.6	%

 

Commercial Services service revenue increased by $12.2 million, or 16.6%, from $73.5 million for the three months ended March 31, 2022 to $85.6 million for the three months ended March 31, 2023. The increase was primarily due to increased travel volume and related tolling activity compared to the prior year which was still recovering from the COVID-19 pandemic, especially during January and February of 2022. An increase in the volume of tolls incurred by RAC vehicles along with the

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continued adoption of the all-inclusive fee structure, shifting from an incidental or daily usage rate by our large RAC customers, contributed to a $8.8 million growth in revenue. In addition, the increase in enrolled vehicles as well as higher tolling activity for our FMC customers contributed to a $1.6 million growth in revenue during the three months ended March 31, 2023, compared to the same period in 2022.

Government Solutions service revenue increased by $10.0 million to $83.2 million for the three months ended March 31, 2023 compared to $73.2 million in the same period in 2022. The increase was primarily driven by the expansion of speed programs, as speed is the largest product in this segment and contributed approximately $9.7 million to the service revenue growth. The remaining increase is attributable to expansions across red-light, school bus stop arm, and bus lane programs.

Parking Solutions service revenue grew by $1.4 million to $15.8 million for the three months ended March 31, 2023, from $14.4 million for the three months ended March 31, 2022. The growth was primarily due to increased revenue from software as a service product offerings, professional services and citation processing services related to parking management solutions.

Product Sales. Product sales were $7.2 million and $9.3 million for the three months ended March 31, 2023 and 2022, respectively. Product sales decreased by approximately $2.0 million, which was mainly due to a $2.9 million decrease in product sales to Government Solutions customers, offset by a $0.9 million growth in product sales in the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.

Cost of Service Revenue. Cost of service revenue increased from $3.8 million for the three months ended March 31, 2022 to $4.2 million for the three months ended March 31, 2023. The $0.5 million increase was mainly due to increased recurring service costs in the Parking Solutions segment.

Cost of Product Sales. Cost of product sales decreased by $0.6 million from $6.0 million in the three months ended March 31, 2022 to $5.4 million in the three months ended March 31, 2023, which was mainly due to a decrease in costs in the Government Solutions segment offset by an increase in costs in the Parking Solutions segment.

Operating Expenses. Operating expenses increased by $10.8 million, or 21.1%, from $51.1 million for the three months ended March 31, 2022 to $61.8 million for the three months ended March 31, 2023. The increase in 2023 was primarily attributable to increases of $5.7 million in wages expense, $1.6 million of recurring service costs and $1.6 million for subcontractor costs compared to the prior period. Operating expenses as a percentage of total revenue increased slightly from 30.0% to 32.2% for the three months ended March 31, 2022 and 2023, respectively. The following table presents operating expenses by segment:

 

		Three Months Ended March 31,
										Percentage of Revenue								Increase (Decrease)  2023 vs 2022
($ in thousands)		2023				2022				2023				2022				$				%
Operating expenses
Commercial Services		$	19,865			$	15,947				10.4	%			9.4	%		$	3,918				24.6	%
Government Solutions			37,604				32,391				19.6	%			19.0	%			5,213				16.1	%
Parking Solutions			4,042				2,511				2.1	%			1.5	%			1,531				61.0	%
Total operating expenses before stock-based compensation			61,511				50,849				32.1	%			29.9	%			10,662				21.0	%
Stock-based compensation			332				214				0.1	%			0.1	%			118				55.1	%
Total operating expenses		$	61,843			$	51,063				32.2	%			30.0	%		$	10,780				21.1	%

 

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Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased to $40.0 million for the three months ended March 31, 2023 compared to $41.6 million for the same period in 2022. The decrease is primarily due to $1.8 million overall decrease in credit loss expense due to improved economic conditions based on customer payment trends in the last 12 months and $1.2 million lower stock-based compensation expense, which were partially offset by higher wages expense. Selling, general and administrative expenses as a percentage of total revenue decreased from 24.4% to 20.9% for the three months ended March 31, 2022 and 2023, respectively. The following table presents selling, general and administrative expenses by segment:

 

		Three Months Ended March 31,
										Percentage of Revenue								Increase (Decrease)  2023 vs 2022
($ in thousands)		2023				2022				2023				2022				$				%
Selling, general and administrative expenses
Commercial Services		$	15,452			$	13,263				8.1	%			7.8	%		$	2,189				16.5	%
Government Solutions			14,640				16,443				7.6	%			9.7	%			(1,803	)			(11.0	)%
Parking Solutions			6,548				7,395				3.4	%			4.3	%			(847	)			(11.5	)%
Corporate and other			327				302				0.2	%			0.2	%			25				8.3	%
Total selling, general and administrative expenses before stock-based compensation			36,967				37,403				19.3	%			22.0	%			(436	)			(1.2	)%
Stock-based compensation			3,046				4,232				1.6	%			2.4	%			(1,186	)			(28.0	)%
Total selling, general and administrative expenses		$	40,013			$	41,635				20.9	%			24.4	%		$	(1,622	)			(3.9	)%

 

Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, decreased by $5.6 million to $30.3 million for the three months ended March 31, 2023 from $35.9 million for the same period in 2022. This was mainly due to certain non-compete and developed technology intangible assets being fully amortized in the three months ended March 31, 2023 as compared to the prior year.

Interest Expense, Net. Interest expense, net increased by $8.4 million from $14.3 million for the three months ended March 31, 2022 to $22.7 million for the same period in 2023. This increase is primarily attributable to rising interest rates over the past twelve months. See “Liquidity and Capital Resources.”

Change in Fair Value of Private Placement Warrants. We recorded losses of $14.6 million and $3.7 million for the three months ended March 31, 2023 and 2022, respectively, related to the changes in fair value of our Private Placement Warrants, which are accounted for as liabilities on our condensed consolidated balance sheets. The change in fair value is the result of re-measurement of the liability at the end of each reporting period. The fair value of the warrants increased primarily as a result of the increase in our common stock price at the end of each period.

Loss on Interest Rate Swap. We recorded a $2.8 million loss during the three months ended March 31, 2023, of which approximately $1.6 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period and $1.2 million related to the monthly cash payments on the interest rate swap.

Loss on extinguishment of debt. We recorded a $1.3 million loss on extinguishment of debt during the three months ended March 31, 2023 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayment of $62.5 million on the 2021 Term Loan.

Other Income, Net. Other income, net was $3.8 million for the three months ended March 31, 2023 compared to $2.9 million for the three months ended March 31, 2022. The increase of $0.9 million is primarily attributable to volume rebates earned from total spend on purchasing cards from increased tolling and travel activity.

Income Tax Provision. Income tax provision was $7.8 million representing an effective tax rate of 63.2% for the three months ended March 31, 2023 compared to a tax provision of $6.8 million, representing an effective tax rate of 40.4% for the same period in 2022. The primary driver for the effective tax rate variance is the permanent differences related to the mark-to-market adjustment on the private placement warrants.

Net Income. We had net income of $4.6 million for the three months ended March 31, 2023, as compared to a net income of $10.0 million for the three months ended March 31, 2022. The $5.4 million decrease in net income was primarily due to the

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change in fair value of private placement warrants, increased interest expense, and the other statement of operations activity discussed above.

Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations and the available borrowing under our Revolver (defined below).

We have incurred significant long-term debt as a result of acquisitions completed in prior years.

 

We believe that our existing cash and cash equivalents, cash flows provided by operating activities and our ability to borrow under our Revolver (as defined below) will be sufficient to meet operating cash requirements and service debt obligations for at least the next 12 months. Our ability to generate sufficient cash from our operating activities depends on our future performance, which is subject to general economic, political, financial, competitive and other factors beyond our control. In addition, our future capital expenditures and other cash requirements could be higher than currently expected due to various factors, including any expansion of our business or strategic acquisitions. Should we pursue strategic acquisitions, we may need to raise additional capital, which may be in the form of additional long-term debt, borrowing on our Revolver, or equity financings, all of which may not be available to us on favorable terms or at all.

We have the ability to borrow under our Revolver to meet obligations as they come due. As of March 31, 2023, we had $74.8 million available for borrowing, net of letters of credit, under our Revolver.

We made early repayments totaling $62.5 million on our 2021 Term Loan during the three months ended March 31, 2023.

Concentration of Credit Risk

The City of New York Department of Transportation (“NYCDOT”) represented 26% and 22% of total accounts receivable, net as of March 31, 2023 and December 31, 2022, respectively. There is no material reserve related to NYCDOT open receivables as amounts are deemed collectible based on current conditions and expectations.

The following table sets forth certain captions indicated on our statements of cash flows for the respective periods:

 

		Three Months Ended March 31,
($ in thousands)		2023				2022
Net cash provided by operating activities		$	45,217			$	31,247
Net cash used in investing activities			(19,584	)			(11,865	)
Net cash used in financing activities			(66,626	)			(28,652	)

 

Cash Flows from Operating Activities

Cash provided by operating activities increased by $14.0 million from $31.2 million for the three months ended March 31, 2022 to $45.2 million for the three months ended March 31, 2023. Net income year over year decreased by approximately $5.4 million, from $10.0 million in 2022 to $4.6 million in 2023. The aggregate adjustments to reconcile net income to cash provided by operating activities increased $21.7 million due to the change in fair value of private placement warrants and the change in deferred income taxes, partially offset by decreased amortization expense year over year. The aggregate changes in operating assets and liabilities decreased by $2.2 million in 2023 compared to prior year primarily due to cash paid for capital purchases that were accrued as of December 31, 2022.

Cash Flows from Investing Activities

Cash used in investing activities was $19.6 million and $11.9 million for the three months ended March 31, 2023 and 2022, respectively. There was an increase in cash used in 2023 related to the purchases of installation and service parts and property and equipment compared to the prior year, and due to the monthly cash payments on the interest rate swap entered into in December 2022 to hedge our exposure to rising interest rates.

Cash Flows from Financing Activities

Cash used in financing activities was $66.6 million and $28.7 million for the three months ended March 31, 2023 and 2022, respectively. The cash used in 2023 was mainly due to the early repayments totaling $62.5 million on our 2021 Term

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Loan and a $2.5 million payment of employee tax withholding related to RSUs and PSUs vesting. The cash used in 2022 was mainly due to the repayment of $25.0 million of borrowing on the Revolver in January 2022 and the quarterly principal payment on the 2021 Term Loan.

Long-term Debt

2021 Term Loan and Senior Notes

In March 2021, VM Consolidated entered into an Amendment and Restatement Agreement No.1 to the First Lien Term Loan Credit Agreement (the “2021 Term Loan”) with a syndicate of lenders. The 2021 Term Loan has an aggregate borrowing of $650.0 million, maturing on March 26, 2028, and an accordion feature providing for an additional $250.0 million of term loans, subject to satisfaction of certain requirements. In connection with the 2021 Term Loan, the Company had an offering discount cost of $3.3 million and $0.7 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan.

In addition, in March 2021, VM Consolidated issued an aggregate principal amount of $350.0 million in Senior Unsecured Notes (the “Senior Notes”), due on April 15, 2029. In connection with the issuance of the Senior Notes, the Company incurred $5.7 million in lender and third-party costs, which were capitalized as deferred financing costs and are being amortized over the remaining life of the Senior Notes.

The net proceeds from both the 2021 Term Loan and the Senior Notes were used in March 2021 to repay in full all outstanding debt which was represented by the First Lien Term Loan Credit Agreement with a balance of $865.6 million.

In December 2021, VM Consolidated entered into an agreement to exercise the accordion feature under the 2021 Term Loan, borrowing $250.0 million in incremental term loans (“Incremental Term Loan”). The proceeds from the Incremental Term Loan were used, along with cash on hand, to fund an acquisition in December 2021. In connection with the Incremental Term Loan, the Company had an offering discount cost of $1.3 million and $3.8 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan. The Incremental Term Loan was combined with the 2021 Term Loan to be a single tranche of term loan borrowings.

During the three months ended March 31, 2023, the Company made early repayments of $62.5 million on the 2021 Term Loan and as a result, the total principal outstanding was $821.4 million as of March 31, 2023. The Company recognized a loss on extinguishment of debt of $1.3 million related to the write-off of pre-existing deferred financing costs and discounts.

The 2021 Term Loan is repayable at 1.0% per annum of the amount initially borrowed, paid in quarterly installments. It bears interest based, at the Company’s option, on either (1) LIBOR plus an applicable margin of 3.25% per annum, or (2) an alternate base rate plus an applicable margin of 2.25% per annum. In March 2023, the Company amended its 2021 Term Loan agreement to transition away from LIBOR to Term SOFR with the upcoming cessation of LIBOR. To compensate for the differences in reference rates utilized, the amended agreement also includes a credit spread adjustment of 0.11448% for an interest period of one-month duration, 0.26161% for a three-month duration, 0.42826% for a six-month duration, and 0.71513% for twelve-months duration in addition to Term SOFR and the applicable margin. As of March 31, 2023, the new all-in interest rate on the 2021 Term Loan was 8.17%.

In addition, the 2021 Term Loan requires mandatory prepayments equal to the product of the excess cash flows of the Company (as defined in the 2021 Term Loan agreement) and the applicable prepayment percentages (calculated as of the last day of the fiscal year, beginning with the year ending December 31, 2022), as set forth in the following table:

 

Consolidated First Lien Net Leverage Ratio (As Defined by the 2021 Term Loan Agreement)		Applicable Prepayment Percentage
> 3.70:1.00		50%
< 3.70:1.00 and > 3.20:1.00		25%
< 3.20:1.00		0%

 

Interest on the Senior Notes is fixed at 5.50% per annum and is payable on April 15 and October 15 of each year. On or after April 15, 2024, the Company may redeem all or a portion of the Senior Notes at the redemption prices set forth below in percentages by year, plus accrued and unpaid interest:

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Year		Percentage
2024		102.750%
2025		101.375%
2026 and thereafter		100.000%

In addition, the Company may redeem up to 40% of the Senior Notes before April 15, 2024, with the net cash proceeds from certain equity offerings.

The Revolver

The Company has a Revolving Credit Agreement (the “Revolver”) with a commitment of up to $75.0 million available for loans and letters of credit. The Revolver matures on December 20, 2026. Borrowing eligibility under the Revolver is subject to a monthly borrowing base calculation based on (i) certain percentages of eligible accounts receivable and inventory, less (ii) certain reserve items, including outstanding letters of credit and other reserves. The Revolver bears interest on either (1) Term SOFR plus an applicable margin, or (2) an alternate base rate, plus an applicable margin. The margin percentage applied to (1) Term SOFR is either 1.25%, 1.50%, or 1.75%, or (2) the base rate is either 0.25%, 0.50%, or 0.75%, depending on the Company’s average availability to borrow under the commitment. There is a credit spread adjustment of 0.10% for a one-month duration, 0.15% for a three-month duration, and 0.25% for a six-month duration, in addition to Term SOFR and the applicable margin percentages. There are no outstanding borrowings on the Revolver as of March 31, 2023 or December 31, 2022. The availability to borrow was $74.8 million, net of $0.2 million of outstanding letters of credit at March 31, 2023.

Interest on the unused portion of the Revolver is payable quarterly at 0.375% and the Company is also required to pay participation and fronting fees at 1.38% on $0.2 million of outstanding letters of credit as of March 31, 2023.

All borrowings and other extensions of credits under the 2021 Term Loan, Senior Notes and the Revolver are subject to the satisfaction of customary conditions and restrictive covenants including absence of defaults and accuracy in material respects of representations and warranties. Substantially all of the Company’s assets are pledged as collateral to secure the Company’s indebtedness under the 2021 Term Loan. At March 31, 2023, the Company was compliant with all debt covenants.

Interest Expense

The Company recorded interest expense, including amortization of deferred financing costs and discounts, of $22.7 million and $14.3 million for the three months ended March 31, 2023 and 2022, respectively.

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 the Company's exposure against rising interest rates.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet financing arrangements as of March 31, 2023.

Critical Accounting Policies, Estimates and Judgments

The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Refer to our 2022 Annual Report on Form 10-K for our critical accounting policies, estimates and judgments. We believe that our estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.

For a discussion of our significant accounting policies, refer to Note 2, Significant Accounting Policies, in Part I, Item 1, Financial Statements.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, refer to Note 2, Significant Accounting Policies, in Part I, Item 1, Financial Statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to interest rate market risk due to the variable interest rate on the 2021 Term Loan described in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.

Interest rate risk represents our exposure to fluctuations in interest rates associated with the variable rate debt represented by the 2021 Term Loan, which has an outstanding balance of $821.4 million at March 31, 2023. The 2021 Term Loan bears interest based, at our option, on either (1) LIBOR plus an applicable margin of 3.25% per annum, or (2) an alternate base rate plus an applicable margin of 2.25% per annum. In March 2023, we amended our 2021 Term Loan agreement to transition away from LIBOR to Term SOFR with the upcoming cessation of LIBOR. To compensate for the differences in reference rates utilized, the amended agreement also includes a credit spread adjustment of 0.11448% for an interest period of one-month duration, 0.26161% for a three-month duration, 0.42826% for a six-month duration, and 0.71513% for twelve-months duration in addition to Term SOFR and the applicable margin. At March 31, 2023, the new all-in interest rate on the 2021 Term Loan was 8.17%.

Based on the March 31, 2023 balance outstanding, each 1% movement in interest rates will result in an approximately $8.2 million change in annual interest expense. Due to the limited history of the use of the new benchmark rate, we are unable to estimate the future impact to our borrowing costs as a result of the discontinuation of the LIBOR benchmark.

In December 2022, we entered into a cancellable interest rate swap agreement to hedge our exposure to interest rate fluctuations associated with the LIBOR (now transitioned to Term SOFR) portion of the variable interest rate on our 2021 Term Loan. Under the interest rate swap agreement, we pay a fixed rate and the counterparty pays a variable interest rate which is net settled. The notional amount on the interest rate swap is $675.0 million. We have the option to effectively terminate the interest rate swap agreement starting in December 2023, and monthly thereafter until December 2025, in the event interest rates decrease. We recorded a $2.8 million loss on the interest rate swap for the three months ended March 31, 2023. See Note 2, Significant Accounting Policies, in Part I, Item 1, Financial Statements for additional information on the interest rate swap.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. Our Chief Executive Officer and Chief Financial Officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures. Based on the results of our assessment, our management concluded that our internal control over financial reporting was effective as of March 31, 2023.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II—Other Information

Item 1. Legal Proceedings

On November 2, 2020, PlusPass, Inc. (“PlusPass”) commenced an action in the United States District Court, Central District of California, against Verra Mobility, The Gores Group LLC, Platinum Equity LLC, and ATS Processing Services, Inc., alleging civil violations of federal antitrust statutes: Section 7 of the Clayton Antitrust Act of 1914 (the “Clayton Act”), and Sections 1 and 2 of the Sherman Act. On November 20, 2020, PlusPass filed a First Amended Complaint. On February 9, 2021, the defendants filed motions to dismiss, and PlusPass subsequently abandoned various theories and claims and dismissed The Gores Group LLC, Platinum Equity LLC, and ATS Processing Services, Inc. On April 27, 2021, PlusPass filed a Second Amended Complaint (“SAC”), alleging that Verra Mobility violated Section 7 of the Clayton Act through the merger of Highway Toll Administration, LLC (“HTA”) and American Traffic Solutions, Inc. (“ATS”) in 2018, and that Verra Mobility violated Sections 1 and 2 of the Sherman Antitrust Act of 1890 by using exclusive agreements in restraint of trade and other allegedly anticompetitive means to acquire and maintain monopoly power in the market for the administration of electronic toll payment collection for rental cars. PlusPass seeks injunctive relief, divestiture by Verra Mobility of HTA, damages in an amount to be determined, and attorneys’ fees and costs. On May 28, 2021, Verra Mobility filed a motion to dismiss the SAC in its entirety, which was denied in August 2021. Discovery is underway and trial has been set for November 2023. Verra Mobility believes that all of PlusPass' claims are without merit and will defend itself vigorously in this litigation.

Item 1A. Risk Factors

Risks Related to Our Business

Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 includes a discussion of our risk factors. There have been no material changes from the risk factors described in our Annual Report on Form 10-K. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future SEC filings.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Purchases of Equity Securities

None.

 

Sales of Unregistered Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Exhibit Index

 

		Incorporated by Reference
Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
2.1	Merger Agreement, dated as of June 21, 2018, by and among Gores Holdings II, Inc., AM Merger Sub I, Inc., AM Merger Sub II, LLC, Greenlight Holding II Corporation and PE Greenlight Holdings, LLC, in its capacity as the Stockholder Representative.	8-K	001-37979	2.1	June 21, 2018
2.2	Amendment No. 1 to Agreement and Plan of Merger, dated as of August 23, 2018, by and among Gores Holdings II, Inc., AM Merger Sub I, Inc., AM Merger Sub II, LLC, Greenlight Holding II Corporation and PE Greenlight Holdings, LLC, in its capacity as the Stockholder Representative.	8-K	001-37979	2.2	August 24, 2018
3.1	Second Amended and Restated Certificate of Incorporation of Verra Mobility Corporation.	8-K	001-37979	3.1	October 22, 2018
3.2	Amended and Restated Bylaws of Verra Mobility Corporation.	8-K	001-37979	3.2	October 22, 2018
4.1	Specimen Class A Common Stock Certificate.	S-1	333-21503	4.2	December 9, 2016
4.2	Specimen Warrant Certificate.	S-1	333-21503	4.3	December 9, 2016
4.3	Warrant Agreement, dated January 12, 2017, between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent.	8-K	001-37979	4.1	January 19, 2017
4.4	First Amendment to Warrant Agreement, dated January 15, 2020, by and among the Registrant, Continental Stock Transfer & Trust Company and American Stock Transfer & Trust Company.	10-K	001-37979	4.4	March 2, 2020
10.1	Form of Notice of Grant of Restricted Stock Units (U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.1	February 17, 2023
10.2	Form of Notice of Grant of Restricted Stock Units (Non-U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.2	February 17, 2023
10.3	Form of Notice of Grant of Stock Option (U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.3	February 17, 2023
10.4	Form of Notice of Grant of Stock Option (Non-U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.4	February 17, 2023
10.5	Form of Notice of Grant of Performance Share Units and Award Agreement (U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.5	February 17, 2023
10.6	Form of Notice of Grant of Performance Share Units and Award Agreement (Non-U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.6	February 17, 2023

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10.7	Verra Mobility Corporation Second Amended and Restated Short-Term Incentive Plan.	8-K	001-37979	10.7	February 17, 2023
10.8	Amendment No. 2 to Amended and Restated First Lien Term Loan Credit Agreement, dated as of March 29, 2023.					X
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
101.INS	Inline XBRL Instance Document (the instance does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).					X
101.SCH	Inline XBRL Taxonomy Extension Schema Document.					X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.					X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.					X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.					X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.					X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)					X
* This certification is deemed not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	VERRA MOBILITY CORPORATION
Date: May 4, 2023	By:	/s/ Craig Conti
		Craig Conti
		Chief Financial Officer
		(Principal Financial Officer)

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