Verra Mobility’s third quarter results drew a positive market response, as the company’s revenue and non-GAAP earnings surpassed Wall Street expectations. Management credited strong performance to the acceleration of its automated enforcement rollout in New York City, which contributed substantial revenue through new red-light camera installations. CEO David Roberts emphasized the strategic importance of these deployments, noting, “We generated $17 million of revenue in conjunction with the red-light camera installations in the third quarter.” Broader growth was supported by recurring service revenues and continued momentum in Government Solutions, further aided by stable travel activity in the Commercial Services segment.
Is now the time to buy VRRM? Find out in our full research report (it’s free for active Edge members).
Verra Mobility (VRRM) Q3 CY2025 Highlights:
- Revenue: $261.9 million vs analyst estimates of $238.5 million (16.1% year-on-year growth, 9.8% beat)
- Adjusted EPS: $0.37 vs analyst estimates of $0.34 (7.7% beat)
- Adjusted EBITDA: $113.3 million vs analyst estimates of $107.4 million (43.3% margin, 5.5% beat)
- The company lifted its revenue guidance for the full year to $960 million at the midpoint from $930 million, a 3.2% increase
- Management reiterated its full-year Adjusted EPS guidance of $1.33 at the midpoint
- EBITDA guidance for the full year is $415 million at the midpoint, in line with analyst expectations
- Operating Margin: 28.6%, in line with the same quarter last year
- Market Capitalization: $3.67 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Verra Mobility’s Q3 Earnings Call
- Faiza Alwy (Deutsche Bank) asked about the breakdown of margin pressures from the New York City contract. CFO Craig Conti clarified that minority and women-owned subcontractor costs are recurring, totaling $20–25 million per year, while readiness costs are one-time.
- Keith Housum (Northcoast Research) requested details on the cadence of New York City camera installations for 2026. CEO David Roberts replied that the rollout is expected to be relatively smooth but may vary due to weather and other factors.
- Louie Dipalma (William Blair) inquired about the timing to finalize the New York City contract. Roberts indicated only administrative steps remain and expects completion in the near term.
- Chao Zhang (UBS) sought clarification on California pilot contract inclusion in guidance. Conti explained only awarded pilots are included, with future opportunities excluded due to uncertain timing and revenue recognition.
- David Koning (Baird) asked about the acceleration in non-New York government revenue and related margin expansion. Roberts highlighted a strong contract win rate and backlog conversion, while Conti referenced MOSAIC’s role in future margin recovery.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will focus on (1) the pace and profitability of New York City camera installations and final contract execution, (2) early revenue contributions from new legislative wins in California and other markets, and (3) the operational rollout and measurable impact of the MOSAIC platform on efficiency and margins. Additionally, progress toward margin stabilization as contract mix shifts and recurring cost structures evolve will be closely monitored.
Verra Mobility currently trades at $22.99, down from $23.80 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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