Verra Mobility revenue falls 1% to $258.9 million as profit declines
Key Facts
Verra Mobility reported results on October 30 for the third quarter ended September 30, 2026, posting revenue of $258.9 million, down 1% from the same period a year earlier. Net income was $40.4 million, compared with $46.8 million a year earlier, while diluted earnings per share fell to $0.27 from $0.29. The company said adjusted earnings per share were $0.36, compared with $0.37 in the third quarter of 2025. Adjusted earnings before interest, taxes, depreciation and amortization fell to $103.9 million from $113.3 million. The results show a divergence between growth in government solutions and weakness in commercial services, alongside a narrowing adjusted EBITDA margin.
Adjusted EBITDA margin fell to 40% from 43% a year earlier, alongside declines in revenue and adjusted earnings. In the commercial services segment, revenue fell 14% to $100.3 million, driven chiefly by a 20% drop in rental car toll revenue. The company attributed the decline to one customer reducing its fleet volumes, fluctuations in customers’ fleet volumes and weaker travel demand. The drop put rental car activity at the center of the segment’s pressures during the quarter. Government solutions delivered a stronger performance.
Government solutions revenue rose 12% to $136.8 million, driven by growth in road safety services and the installation of new cameras in New York City, according to the company’s statement. That growth helped limit the impact of the commercial services decline but did not prevent total revenue from falling year over year. On liquidity, cash generated from operating activities rose to $114.5 million from $77.7 million in the year-earlier quarter. Free cash flow also increased to $89.4 million from $49.0 million. Cash flow therefore improved alongside declines in net income and adjusted earnings.
In the nine months ended September 30, 2026, the company recorded impairment charges in its parking solutions segment, including $64.0 million for goodwill and $40.4 million for intangible assets. Regarding customers, Verra Mobility exercised its contractual right on October 2 to terminate its agreement with Avis Budget Group, with the termination effective January 30, 2027. The company said Avis significantly reduced its fleet volumes during the third quarter. The contract’s termination date falls after the period covered by the reported results, while the company had linked weaker rental car toll revenue to one customer reducing its fleet volumes and fluctuations in customers’ fleet volumes. The expected end of the agreement makes developments in this activity an important part of tracking the segment’s performance in coming periods.
Despite the declines in quarterly revenue and adjusted earnings, the company reaffirmed its fiscal 2026 guidance. It expects revenue of $945 million to $965 million and adjusted EBITDA of $360 million to $370 million. It also maintained its adjusted earnings per share range of $1.11 to $1.17 and free cash flow range of $105 million to $115 million. In management, Jon Newhard was appointed chief executive officer and president effective November 1, 2026, while Matthew Kvarda will begin serving as interim chief financial officer on November 5. The company said it will not hold a conference call for its third-quarter results and expects to resume quarterly calls when it reports fourth-quarter and fiscal 2026 results.
VRRM shares closed at $3.34 on October 29, 2026, the eve of the results announcement. The trading data provided do not include the stock’s low or high for that session. The company had scheduled the third-quarter results announcement before the market opened on October 30. The company did not hold an investor call after the announcement, according to its statement. Quarterly calls are expected to resume with the announcement of fourth-quarter and fiscal 2026 results.