Verra Mobility Corporation · NASDAQ:VRRM
Verra Mobility — Q4 2022 Earnings Presentation
24 slides from Verra Mobility's earnings presentation, February 2023
Slide 1: Verra Mobility Q4 2022 Earnings Presentation
Earnings Overview Verra Mobility Q4 2022 Earnings Presentation For the Quarter Ended December 31, 2022
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,”
Slide 3: Key Highlights and Strategic Priorities
Key Highlights and Strategic Priorities David Roberts President and CEO
Slide 4: Outstanding Q4, highlighted by strong Revenue, Adj. EBITDA and Free Cash Flow
Outstanding Q4, highlighted by strong Revenue, Adj. EBITDA and Free Cash Flow Q4 2022 Financial Highlights Q4 Key Highlights • Strong fourth quarter top-line performance across all business segments • Commercial Services: 14% Y-o-Y growth driven by strong travel demand Total Revenue • Government Sol
Slide 5: Smart Mobility Trends Shaping our Future
Smart Mobility Trends Shaping our Future Strong and Improving Traffic Refocus on Improving Urban Durable Travel Flow to Address Vision Zero and Mobility and Demand Congestion Safer Roadways Managing the Curb U.S. airlines remain upbeat We’ll see a continued shift to With traffic fatality trends We e
Slide 6: Strategic Priorities Focused on LT Value Creation
Strategic Priorities Focused on LT Value Creation Key Objectives • Meet or exceed 2023 financial guidance and long-term estimates Drive Core Business Outcomes • Furthering Verra Mobility’s position in core markets • Pursue adjacent expansion opportunities through new product development Build the Ve
Slide 7: Commercial Services: Strategic Priorities
Commercial Services: Strategic Priorities 1 Renew Enterprise tolls and violations management agreement 2 Continue adjacent expansion opportunities: Fleet Management expansion and European growth 3 Laying the foundation to capitalize on next generation connected fleet opportunities Strong core busine
Slide 8: Government Solutions: Strategic Priorities
Government Solutions: Strategic Priorities 1 Open new cities and states through enabling legislation 2 Investments in software platform to enhance competitive advantages 3 Pursue emerging opportunities across Urban Mobility through strategic M&A and partnerships Strong core business positioned for L
Slide 9: T2 Systems: Strategic Priorities
T2 Systems: Strategic Priorities 1 Pursue new logo business while expanding hardware and software offerings to existing customers 2 Increase core business growth outside of the university segment and into mid- and large-scale municipalities 3 Invest in platforms to drive new revenue streams and furt
Slide 10: Financial Discussion
Financial Discussion Craig Conti CFO
Slide 11: Strong top-line, profitability and Free Cash Flow generation
Strong top-line, profitability and Free Cash Flow generation Consolidated – Q4 Results Total Revenue ($M) Service Revenue ($M) Core T2 Systems NYC Product Core T2 Systems $186 $179 NM Total Total $15 +9% $145 +24% $170 $20 $4 $21 $7 Organic, Organic $164 ex NYC $166 $141 +16% Product $143 +16% Q4 20
Slide 12: Record levels of FY22 Revenue, Adj. EBITDA & Free Cash Flow
Record levels of FY22 Revenue, Adj. EBITDA & Free Cash Flow Total Revenue ($M) Adjusted EBITDA & Margins ($M) Core Redflex & T2 Systems Total Revenue $742 Adj EBITDA 700 CAGR 18% $110 CAGR 12%2 46% 600 12% Organic $551 49% $45 500 54% 400 46% 300 $632 $339 $506 $241 $271 200 $449 $394 $182 100 0 201
Slide 13: Robust travel demand driving strong performance
Robust travel demand driving strong performance Commercial Services – Q4 Results Total Revenue & YoY Growth Adjusted EBITDA & YoY Growth $49 $82 $71 +14% $44 +12% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 – Key Highlights • RAC tolling revenue up 9% over Q4 2021 due to increased travel volume and adoption
Slide 14: Revenue growth fueled by NYC School Zone Speed expansion
Revenue growth fueled by NYC School Zone Speed expansion Government Services – Q4 Results Total Revenue & YoY Growth Adjusted EBITDA & YoY Growth 1 Service Revenue Product Revenue Core NYC Product Total Rev $34 $92 (8%) $85 $31 $8 NM $23 $2 Ex-NYC $30 Srvc Rev $82 $26 Product $69 +19% +17% Q4 2021 Q
Slide 15: Parking Solutions financial results in-line with deal thesis
Parking Solutions financial results in-line with deal thesis T2 Systems – Full Year 2022 Results 1 1 Total Revenue ($M) Adjusted EBITDA & Margins ($M) Service Revenue Product Revenue $22 $20 19% 20% $18 $19 $5 $4 $4 $5 18% 16% $17 $4 $4 $14 $15 $15 $3 $3 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2022 Q2 20
Slide 16: Strong Adjusted EPS and De-levering performance
Strong Adjusted EPS and De-levering performance Adjusted EPS Net Debt & Leverage $1,172 $1,152 $1,157 $1,187 $1,131 4.3x $0.27 $0.27 $0.25 $0.24 $0.22 3.8x 3.5x 3.5x 3.3x Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Consistent earnings power and continued de-leveri
Slide 17: 2023 Financial Outlook delivers strong revenue growth, margin expansion and FCF conversion
2023 Financial Outlook delivers strong revenue growth, margin expansion and FCF conversion 2023 Guidance In millions, except per share data & net leverage Commentary Total Revenue growth of 5% to 7% as CS … HSD growth reported; ~6% to 8% in constant Fx 1 T2 … HSD growth Total Revenue $780 - $800 CS
Slide 18: Additional 2023 Guidance Assumptions
Additional 2023 Guidance Assumptions 2023 product revenue expected to be about $30 - $35 million (GS: $10 - $12 million; T2: $20 - $23 million) 2023 fully diluted share count of approximately 156 million shares (average for the year) Effective tax rate of approximately 29% to 33% including State tax
Slide 19: Investor Day L/T Outlook
Investor Day L/T Outlook Exceeded 22’ Guidance and On-Track for 26’ 2022 Actual July 22’ Investor Day Outlook Result Status 2022 E Future State (2026) $742MM Exceeded Target A A B $339MM B Exceeded Target Organic Revenue A $730 A 6-8% CAGR to ~$1B C 3.3 x C Exceeded Target D $170MM D Exceeded Target
Slide 20: Appendix
Appendix 20
Slide 21: Verra Mobility Quarterly Results
Verra Mobility Quarterly Results 2020 - 2022 Unaudited ($ in millions) Full Year 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Full Year 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Full Year 2022 Service revenue $336.3 $89.8 $116.4 $141.8 $144.8 $492.8 $161.1 $174.5 $180.6 $179.0 $695.2 Product sales 57.3 0.1 12.2
Slide 22: Verra Mobility Quarterly Results: Segment Results of Operations
Verra Mobility Quarterly Results Segment Results of Operations Commercial Services Unaudited ($ in millions) Full Year Full Year Full Year Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2020 2021 2022 Total Revenue Commercial Services $180.9 $45.7 $66.5 $77.3 $71.5 $260.9 $73.5 $84.
Slide 23: Verra Mobility Adj. Net Income and Adj. Diluted EPS Reconciliations
Verra Mobility Adj. Net Income and Adj. Diluted EPS Reconciliations (in $MM, except per share data) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Net Income $ 10.0 $ 29.6 $ 24.6 $ 28.2 Amortization of intangibles 27.3 27.2 26.6 25.1 Transaction and other related expenses 0.2 0.3 3.0 (0.1) Transformation expenses
Slide 24: Thank You
Thank You http://ir.verramobility.com/