Verra Mobility (VRRM) 31 Oct 242024 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Verra Mobility Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Mark Zindler, Vice President, Investor Relations. Please go ahead.

[Audio Gap] demonstrating what we view as the predictable strength of our portfolio of businesses. EPS financial year, our year guide we adjusted and year-to-date remainder for XXXX to our the EBITDA the increasing of of are adjusted the on upper performance cash the outlook and the revenue, adjusted end Based free while range. flow guidance reaffirming full

albeit value the elaborate businesses. demand, The our on his the major Craig resilient underpinning continues off details will suggest remarks. Today, of sentiment from half drivers in the we'll airlines to highlight XXXX X first current travel highlights.

photo Second, for is demand the growing. automated enforcement strong and

the free to trajectory. for are optionality Third, and the to continues fourth, measures putting company business generate growth stabilize cash flow, we its And allocation. robust TX providing place in Parking capital rejuvenate

passenger period, driven strong demand. demand of XXX% with as about at business year-to-date September by same XXXX stood Starting volume the of TSA volumes consumer and for XX travel

October, week in However, due last second the and travel week decelerated and particularly has of the in hurricanes. September the September to October of

seen have the assumed travel feel back we so volumes reacceleration a about of levels travel guidance, our we comfortable close in year. as to out the recent We

with Additionally, commensurate growth indicates the from current airlines, independent volume major year. reviewed next the we surveys with have resilient along TSA sentiment suggesting type demand, the growth GDP

solid results trends the domestic in outstanding performance Services by driven Commercial and performance delivered travel business. had We strong continued These RAC a strong our impact fleet business. on in management tolling

rack period over million we're year due about and profit XX% segment quarter last grew up strength to over the quarter year points basis margins revenues XX% in primarily Third of the tolling. $XXX prior XX of the

tolls rental of drove in adopted incurred, resulted in revenue. a rack travel solid in quarter agreements demand third increase X% all The tolling which growth and

year customers. increased $XX new generated from of FMC by primarily over X% representing growth for business the tolling FMC of vehicles our Additionally, and quarter, period, the prior driven million revenue enrollments

Solutions over to revenue, primarily of growth total new efforts existing Government photo road X% for and year. service to the same program driven was which The from revenue XX% expansion the last revenue Moving enforcement implementing on cities grew is improve customers and quarter safety. period revenue, by reflects recurring service

New prior point, this were drove these year due we of Total outside international sales about revenue York revenue, XX% quarter. City, X% To to service including the over up factors. product growth

the saw awards strong at the a contract picture, for has been in actions third big enforcement never additional Looking and demand stronger. We quarter automated enforcement. legislative automated supporting generated

won full million we recurring representing representing million. share of bringing to award revenue ARR. million $XX largest $XX supporting and incremental incremental the our ARR stop annual bustling automated quarter, awards enforcement AI third contract with about our bus partnership total $X the of with The Hayden through incremental the at In approximately run came rate, year-to-date

partnership Our enforcement. enforcement for automated beyond expanding speed Hayden light AI with demonstrates red opportunities the and and new

enforcement programs $X represent Additionally, which speed and awarded we which total and of Other $X in of contracts state, incremental ARR in million Australia $X in Washington incremental million notable awards combined, ARR. million representing about in represented ARR. about Florida incremental about were include Canada,

safety us As is California's I'm that authorization. state's This Municipal automated legislative program. we program to month, report the our safety the this the press speed San Agency to earlier under its shared excited Transportation in Francisco manage awarded first release speed contract

a to with -- early and we sites operate XX this design goal XXXX. a will fully at fully program San Francisco. is program speed have The build, maintain operational program operational Under safety in contract, across a cameras

the to state year. programs what These step safer the are we will initiative a California next more to speed California. City pilot demand speed over other anticipate be in roads as expect make safety a citizens in broader Additionally, we competing solutions programs from for help across lawmakers pilot the enforcement pivotal expand

submitting the forward New look City. our proposal We for York automated to traffic on Moving to enforcement program.

safer New trusted automated be is and technology efficient, us more road York technology the highly enforcement partner program to and City many to they have make their leader complex for using a years. for

for we opportunity. afforded the we the program today, evolving city's quickly very is the procurement should competitive to While a subject scope and and support confident meet of the to ready remain we the meet be process, ongoing our that remain services program needs specifications the

in New cameras milestone excited intersections signed law to also Life Red is week, Zero. and York's of the city XXX New earlier that into at of This objectives expansion of goals York. was We're bill for expansion important the additional last allowing Vision an

generated brief and update quarter quarter, We profit the Systems. second we the revenue dollars on third a $X Segment anticipated. approximately quarter growing over for million million internal margins TX slightly expectations. the of with profit as below $XX was our segment sequentially for Next,

experience our valuable bringing enhancing driving executive to and team joined business Boe efforts. Lynn lead that announced growth we leadership August, in transformation leading operations, In TX,

revenue durable our enforcement a strategic strong of around TX revolved reminder, As for and thesis cities and recurring permits the around and universities.

acquisition increase unique encountered challenges and December We we related urbanization date, time management. current expect of with challenges this XXXX. closed we to have since the several time in To the over to

payment to away which of and revenue a industry historically transition hardware and software parking services, has on the represented related focus about solutions. mobile First, XX% from experienced

is [indiscernible]. long This our to expected impacted term, business but short-term growth benefit revenue the has in

this to drive market expect and the we're our a SaaS steps generation, greater area. to pipeline taking long-term needed working conversion Additionally, reselling earnestly revenue of for Lyn is backlog of The significant, execution organization opportunity is and performance. execution and see and the on TX we to drive in

team. company-wide. Vice improvement Verra Harshad help enhance Transformation. continuing of operating appointed added and adoption executive our of will Karthi the We role, experienced the Business business another talented the also to leadership culture ensure We of Senior system In this Mobility's Harshad as our President continuous and

capital flow $XX cash generating significant This free of million deployment. for quarter optionality quarter. third record a reported we the Next, for provides

M&A authorization. in technology been approximately existing and million opportunities we current remaining have sectors, evaluating share our $XX adjacent under also We actively have and buyback

targets relative July XXXX intact and revenue we the adjusted our EBITDA Next, outlook to at our remains Investor Day. provided long-term

we've be on we we're current in indicated, converting of other at Solutions the to X% our there will our to Based next where guide below anticipate rates X% backlog end growth we growth and long-term years revenue targets. XXXX. the or where of year-over-year low travel at years of cadence exceed views As our and the growth modestly year demand Government revenue,

business the the front customer and expect XXXX invest we to XXXX exit strong of digits revenue mid-single installs and in In XXXX EBITDA generation low growth as we development expected dollars complete XXXX. to in be continue compared to in in to addition, adjusted into as we

his outlook. summary, exactly we Craig we year the remarks. will first We've our in have of performance. great, what we and about the key on months said in would X done financial elaborate excited the long-term are been of terms In drivers do very

Additionally, our enforcement and sharing travel demand strong growth appears to to a and the strategy. This is and to I continue highs bid remain additional as a is for off solid, automated XXXX look great against growing. the pipeline future, bright execute we forward updates with albeit business

American road higher night as according on are Before any safety I of our drive high-level so conclude, Medical dangerous that treating estimates. and compared other kids reminder tricker dusk. can be the is turn to Halloween to to published through guidance at the guide Journal Association, research by a over risk to financial please pedestrian a it responsibly. potentially current of results, like I'll share XXXX to preview XX% of year safely you Craig, us [indiscernible] facilities financial and The I'd fatalities

David, on today. everyone. you, the hello, and you joining Appreciate Thank us call

Let's business the quarter. the financial key turn for to outlines the which Slide consolidated third X, for measures

strong which in revenue X% right third services and commercial of York plan, the QX revenue Solutions revenue. on included was revenue City New primarily total outside service and driven was services revenue quarter was travel demand Government growth business of performance recurring and growth, business. [indiscernible] the service Our The which growth by

Solutions segment quarter, contributed in PX revenue and Systems over declined year-over-year. $X X% year, quarter delivered Commercial Services revenue overall. SaaS and for million, grew the over the $X services prior about product while the sales million XX% QX revenue Product year. increased last level, At million the by of $X GS Government was third Service X%

for flat. We This rate Our the margins the year million, $XXX tax impacted of reported certain EBITDA provision million, quarter includes rate which tax favorably was increase of consolidated for adjusted versus tax XX%. million net rate with last an for of $XX discrete income representing $XX including of effective X% quarter. the a approximately an items, about quarter the

tax. the full an year, XX% approximate we're effective For anticipating

which EPS, $X.XX $X.XX nonrecurring per in $X.XX to to was of quarter XXXX, excludes EPS for and XXXX year-over-year. for representing the quarter compensation prior $X.XX quarter stock-based this share per GAAP of period. for items, third the the year compared Adjusted the of year compared share XX% per share third amortization, was per share other third as

due Cash collections which working quarter, our million cash was $XXX run above activities million flows items. the catch-up capital totaled free provided a and cash delivered for nonrecurring we operating on to flow by $XX quarterly and of rate other

approximately XX months, generated adjusted We've EBITDA a $XXX EBITDA adjusted representing of Turning the Slide $XXX of to revenue on million margin. X. trailing for XX% million

shares. weighted conversion trailing $XXX average adjusted a on of free EBITDA cash over XXX million of million flow generated of XX XX% Additionally, months, we a or approximately base the adjusted

through over in rental X% year-over-year volume driven Slide increased Next, performance CS revenue I'll same quarter. X Commercial third $X segments, increased X. business and the growth on the period quarter was our the revenue million third walk strong last with of each year, tolling RAC volume. of by about Services travel or beginning XX%

tolling X% existing new million enrolled growth FMC the by grew or $X vehicles and driven the customers. enrollment business FMC year-over-year, of newly from about and Our

violations to profit Commercial margins XX million about of [indiscernible]. the by volume growth driven Europe summer leverage management Services season. the expanded contributed combination registration, segment XX%, of basis points approximately title Additionally, from driving and revenue in $X

efforts, to X% for Solutions Total driven Segment in the -- period. our profit due Turning on strong business Government quarter. platform New and XX% X. prior margins quarter quarter, of the XX% representing margins favorable year over prior grew in the portion City. of the debt year outside the a growth in versus $XX primarily prior of non-capitalized bad York revenue service year investment growth had reduction the by increased million was to nonrecurring and the development adjustment Slide revenue is spending

bit to sales Systems, and $XX were Solutions a further, the is was X% revenue the $X Breaking or low down year of SaaS revenue quarter, which quarter. Parking $XX the the product or in digits single profit quarter. we SaaS compared QX $XXX,XXX of view year services results million a over revenue Slide segment our down for grew generated pure $XXX,XXX, while prior Let's year. of for service million and generated from digits grew business We last and X% to -- revenue down segment. SaaS turn single low X of the prior approximately million

However, decline offsetting past other reduction X quarters. professional a due in this product in installation sales the over the increase to and was services

Okay.

and Let's turn take to at X look closer a balance leverage. Slide sheet discuss the and

can our due you have with basis sequential and ended million, strong net $XXX see, debt liquidity we we flow a cash As balance with down X.Xx, of with quarter significant of this credit ended a the free maintained to quarter. net We revolver. quarter our the generation undrawn significantly leverage on

Based yield is approximately balance billion, early cancel for the of option forward on debt. loan of Our we $X.X and Consequently, about which fixed floating year-end gross the utilize at stands rate sulfur the $XXX rate opted fully at entirety now spot. to term float our our termination curve, floating. million is debt

completed was debt fees average about a current the lowering was of rate, repricing XX savings our debt term [indiscernible]. full the we in end cumulative quarter, debt The cost reduction This the transaction $XXX second the silver plus yields it net the our SOFR in of XXX The in billion year In point weighted this our to materially being million over the back, a to oversubscribed we effect addition, lowers of total at B. successful basis achieved our debt. On our X.X% spread repricing $XX to basis X.XX%. points of remaining of reduction repricing a and life subsequent this about of third levels. successful this loan cash a coupon

a and adjusted XXXX year Let's turn adjusted remain at XX unchanged. guidance. EBITDA have Slide Revenue, full and to look EPS

free adjusted increasing the upper are range. to end we However, cash the flow of

review, of I'll guidance total purposes run-through by a give of you For [indiscernible]. year quick our

the to the dollars We expect per CapEx of is expected Adjusted of X% the total driven upper end now and upper to of of lower EPS by $X.XX to share X% anticipated at cash to compared flow is approximately growth be $XXX free million adjusted at of range rate. end revenue XXXX. million, $X.XX approximately EBITDA $XXX Adjusted growth the spending.

about spend beyond by $XX land lower And is we finally, the XXXX an at third CapEx. to of net use expect CapEx increased Xx capital in The expect quarter. investments spend through no approximately partially the We investments and capital. assuming will made allocation leverage million working we've additional offset

Our incorporates toll in revenue rack road quarter as Hurricane. historical as certain temporary guidance from reduction modest travel by tolling a trends driven suspension Florida fourth stemming well

service be fourth up slightly generating incremental customer to installs quarter due Solutions revenue ARR. is the Government expected to in

fourth quarter. be is revenue Solutions Parking Finally, expected to sequentially in flat about the

line supporting our free in level, the total assumptions cash flow sequential expect our to company adjusted be and Other quarter, found at adjusted on outlook margin Additionally, in fourth guidance. existing slide. key expansion EPS we with the

to out. a of we how play brief will move expect let's preview XXXX Now

remind complete, may annual not these I'll you change. operating plan our so is that yet estimates

we mentioned, at anticipate X David end factors. our of year. driven As X% currently long-term next largely X% guide revenue is by the This to low growth

services that TSA passenger type GDP decelerate commercial with will be and will revenue. First, we're which impacts next growth growth line in year, anticipating volume overall

expect Second, take from City, bookings we've Solutions New we of await procurement. the while lastly, outcome competitive we convert ARR year may our a had adjusted perspective, costs generating our largest it dollars portfolio expect flat terrific customer, new while digits in a financial the this by run. in XXXX revenue low investments. From into profit up Government business, And York full grow to we mix, and to mid-single XX EBITDA driven primarily to TAM to months execution infrastructure backlog

government you bit project ERP. costs item little of backlog previously incremental of and cost give growing item our is between incur we business trend. me of financial The costs business driven Let by go aging replacement our largely these relates to as TAM detail on our execution in The advance in-flight development infrastructure a our converting live discussed drivers.

continue mix expect first These will this $X to our complete to of in primarily business project million and costs we where are growth in not We past about nature expect costs incur the commercial project. the XXXX. onetime portfolio in is year half travel noncapitalized year-over-year. The

business, relative to will growth other in limiting margin growth that expansion. moderated drivers the However, be

level, cash at adjusted a From perspective, about anticipate to XX%. XX% to to we be free cash the EBITDA company total our flow XXXX conversion

evaluate Finally, Consistent to as our have execute we left Dave million past indicated, approximately and on we capital our with $XX open optimal returns share will authorization. deployment practice, the reporting. buyback

summary, resilient leading our the think We recurring in business are the GS healthy, strong in revenue demand are fundamentals growth of travel solid. and core future. In bookings is the to

recovery parking to we the Additionally, growth identified have in path a business. and

our On you adjusted for This your we concludes attention the remains trends, and time our Day. our remarks. prepared that outlook July basis of XXXX and revenue these the long-term today. relative EBITDA anticipate we provided at to targets Investor intact Thank

Aludi to line the I'd to to questions. going to time, you. any Aludi, over this open send like for I it invite At

UBS. your Cremo of And Instructions] line from question [Operator Nik first comes the with

Congrats on strong and the David Craig. results,

I touch City the [indiscernible]. wanted First, to on York just New

about on advantages what I So the we as that but we investments you renewals just winning relative Rack your Barra some confidence many when record competitors strong to [indiscernible] side any past? in up the also including large business, and back? of hear renewal the has to be there to this the some the other that renewing going level of after know platform of making would of helpful as could And it update large of a hear on been the you've think successfully customers of see how in this competitive track shapes to relative

to a question. mean of that I for under we're Yes. our about I is, the limits which the types respond it's different David. RFP, ability one, questions. it way to really guess of Thanks obviously an lot I think

we I couple have feel is One a with those. I to for what customers say that, it as time good technology. customers other that, things. that about really think world have think New we we best-in-class down of quite like support also within would that technology we And the around we've is York to some related serve comes So served best-in-class our our I

the responses thorough. quite think are that I need not will some last is of question anticipate related part to real was to The The you year, due just perspective. I city We expect on clarity And that to your that. I of right away. some to next RFP week. anticipate would win. give anytime not respond QX time responses the quite maybe next probably to would would

the Can it. year? some should think growth see next like Also, in winning business back the And as Got preliminary Government half acceleration of that comes you XXXX an for Like then New just York 'XX how just about the the cadence on online? Solutions year? we of And you're ex the throughout we should maybe ARR outlook. City discuss the of

Yes.

the Thanks question. is Let for the Craig. this me Nick. -- take

So part let me take the second first.

York year. New City, look is just to David with going and until Everything is well about as know into that like live, for we the that of what just plan RFP said, York has XXXX. flat that the is we're outcome the we talked City we're year-over-year won't XXXX New to

spend clear is I TAM second. the The the piece first execution infrastructure infrastructure work talk mix, As the the one the go cadence, The you a a and definitely in for want piece, about financial is this. about to the and back that I'll about I it. portfolio is profit half. I if the talked on do financial to bit more thing think little one drivers, X of

in incur X We . half. expect first would won't back see that the I months. that So that we'll

the would absence plan, think business half a see is revenue would installed those start I those TAMs we've of about see the growth we're -- of completed -- take As in as again, are of pacing over talked back the that larger XXXX of in started. once sequential do I I But to increase this, new this expect foot to I about the in Solutions some thrusted Government the to and in and XXXX. again, expect going

Securities. CJS Your Moore next line question the from comes with Daniel of

'XX terms ordering services your Probably self-evident, fiscal rank with [indiscernible], growth? underlying just digit, kind thinking outlook Solutions a assume but of we And are to Government fair what the Are about in digit that? for given if the mid-single to it for mid-single -- for of maybe XXXX, commercial little assumptions higher than bit low

I go Yes. -- level. the would that you at let's high very business question. say understand by on fully a where business I

sees out I the think long-term about think whatsoever. it, think to way right? Investor it end today put the it's to be I for Day. that would the don't digits be guide single on low we near see anywhere I don't -- of lower --

low travel guide is say of the let's at growing that underlies the that just assumption that growth long-term So and and end year-over-year. -- the [indiscernible] like

think about strength. On high on of side the We've business, the talked GS I guide. long-term going the to be that's our

back really year. at think seen at we'll as change we've level. some sales in be think And best They're going half think a single calculus of or grow I that for we'll I today. don't on that I if is the GS digit, see pick the view bit the TX XXXX my we we pressured digit low it's more growth speaking, is XXXX to do similar and going the but consolidated of to episodic. frankly year. little to I rates mid-single think see up revenue growth, this equipment

how can So what and that's it rack see stack I we today.

how you the the XXXX. legislation, XXX And -- about legislation opens by York of but Governor as you if talk York both opportunity the past New as up some RFP, purchase signed York expect light and about Curious red of that think also to you sense. New City, New rest or then by magnitude just can't alluded they too but scale across if in in have the camera to, Makes set cameras the the much obviously, program legislation increased interesting enabling you the state. the

I the New sidelines mean, the cities. on just had week, a I make any probably don't into but related they'll will York at conversations, this that the I the passed have Yes. until think RP legislation we've And determination would that sit anticipate direct time. that and to you read I is up so that. wouldn't finalized,

in remember, the whether Q&A you looking did place about if know would of public New some was for they they at York people rest is in the own actually country. that is past, that this buy the operating ask from And the of talk and would the we I or the model we whether build have

And So it of how the York choice part other they prevalent the your being it. any see more past. will. make in been camera in their quote again, future don't the States the than purchase that's will respect City I we'll With in United direct has New as to a question is

the is [indiscernible]. of to simple the now first part So answer

Right. leverage out, I'll but approaching now Maybe jump last year-end. by just one, Xx with

investments shareholders range? low a rather of leverage continue further Just flow for reinvesting to Or cash talk than the about target maybe you accelerate kind barring meaningful down push return long-term or to pay M&A, and/or would and priorities debt? below cash

there I changed ultimately, anything has our I Yes. in terms mean, don't prioritization. of think

business growth, continue thing the want continue level. first perform we ways and The to to to at for is to look

to both via looking business be opportunities invest in the we'll So as as at to opportunities invest well M&A.

upon the been what related always calculate returns gives as the on of to very, to those, both our that. share different a us And great just really at I Based looking timing we're very active repurchases. think we transactions. we position as or types balance think I cash about open we've think

the we earlier, we $XX Craig And as a debt twice authorization million this mentioned have today. as year. outstanding refinanced We -- we've done sit twice debt

to because whatever of quarterly have those the we're cash a generation decisions -- able I company, the of makes view. think make of pretty in we're to flow sense. And we kind open So

So on -- the front. cash we're with right remain really we M&A now, and active our position, comfortable

target I as incremental that still would the deployment quarter, were capital don't we target. of said in third remarks, result, add So X, at land where going net end right? I we a the to from we leverage, be Xx just do to if any not have we prepared of at that that's a the is if a

the So changed. on company for target thought leverage net hasn't the

Your with next question from the Faiza comes Deutsche Bank. of line Alwy

was So cost a you hoping bit you costs. I Craig, give that And little portfolio could and us think you I more talked mentioned color incremental mix on the XXXX. for some about

you So help us, some be things would just frame can those if of for helpful. that

sure. Yes,

one, So Faiza. one them take I'll by

So for -- question. and thanks the

before. the this can't mix, competitive portfolio this GDP-like travel, at there are are margin with in go too specific percentages reasons, in growth business business the know call on on different crossed I a that other So of as parts we've I is mine. really CS for

facing in business of XXXX grow the won't So travel we the of there the business material, kind that in the that little which extremely on put next saw little faster of will margins, not be travel, bit of margin a accretion -- see mix. pressure because of parts XXXX a will the [indiscernible] than parts the but we year,

the GES TAM The executions business. in is second part

and costs. sales going previously things continue. of So 'XX think, those lobby, talked about legislation We've through, of I the going a third up here. couple about quarter on

to new TAMs. continue open We

I you rate. in be So about piece the Probably there, run think that's think going the in announcements about, that's the half but year. of the that's piece we've they've also we ARR is really that talked a if ramped to the back bigger

to right? that, follow about So XX And XXXX. so to we is really XXXX we're talking if going lately beyond revenue revenue go the months XX that,

is, R&D piece of goes that what are. some about let install other that that install costs these, me to of to as The as we're And go you tell those part we incur. things going of every there's

since camera and municipalities These for things signage costs. we certain the to But that's this costs do. new back a next little the multiple we So really this of time going different these cambering want year, that that towards custom be We will, revenue are those angles installs, roadside, packages. customized, the building into incur favorable precede of like bit. evidence needs to implementation all every are year have at

-- on I side. when see XXXX, rev is advance and then the to the truck myopically snap final the So financial piece infrastructure cost in going incremental in of we're

about So year, about about ERP $X a implementing this months the around of for is company, costs final for XXXX. this in of the a we've talked will the and of new noncapitalized X first but incur thrust that million

all also in just very level is Okay. higher Understood. I -- a That's quick helpful. X are have XXXX? of follow-ups. spending One expecting you the on CapEx then

by Faiza, Yes, saying, bracket it still that marginally. And I working I I'm would out, here's how would it. bracket

be to range be as in We're conversion I adjusted EBITDA XX% next this to the going a high end the to of going at XX% free flow is range year. of cash think that percentage that year.

the have timing. probably you, back year, a So push did bit, would CapEx, half that to this they I by bit like range installs of we more but those terms widening in that last am to tell could little of get a going as little year

think higher I the be So will year-over-year. roughly CapEx but similar, .

Okay.

a And at dilutive you are are profile the Okay. competition but getting you there than margin cases, winning some over you these to are ARR as last quite one, with we at of know contracts? this mentioned were government then might a time, to difficult look a as -- you margin business? just about I'm new currently them I curious, just mix these in is last but the installation the think ahead new like we contracts should finding these longer year? and least how answer, think do similar you are bit new like margin be you're costs, Or period or where of

generally are Yes. going New say the Craig so in speaking, the continue that, much they some of have win similar relatively prices York like some to to mean is of higher maintain that are have programs margin And been we size and would to I it's depend at outside program. just years, that have we I it's and investments going mentioned winning last I levels where to would what smaller, several the so -- are deals the the of cost. would that earlier. been larger, say on that depend of to the certainly, hope

I And now, it's David. think Yes. right

low that high look right? the -- have I But I though, top in. the the ahead I percent go today, about margin may couple incur to of revenue as very a As XXs, could the sub-XX% we business the have XXs cost go the Visa. it, at being we don't you the because have install that's of here to heavy business was in we years, tippy of this think coming of out a

by selling. I in [indiscernible] scale as So forward. it, it's municipality, I we low also total, on the only a that but as I mean this as continue multiple. very sell But we're one don't we not look variable, to that business sell think general, product, by consolidation, in [indiscernible] we mode at about in volume

Baird. from Your the Koning line with of next comes question Dave

does is back pretty that on quarters or was service -- X% that maybe this part believe soon? was the up I I of And doing this had parking, bought But flat that service year-over-year think, just is? down about for kind all, refresh for, side, of been on so mode to just you what the all the to thanks parking on it almost first Yes. growth why of since too, it. quarter, get

equipment tend also SaaS Sure. They're of services component. pure That is there which the installation business contains things. and warranty the to the service X side within follow services,

prepared that of which the the to year-over-year, the been pure mid-single that because at I you remarks, of consolidation are like XX% X%, we call percent side year-over-year. back component, grew SaaS mid-single just services the services half are our digits business, couple we down of service that's that as in If in is So know, following digits the and look those. component, X%, bifurcate even down in as year. which tried pressured was roughly is, what the we're something what the that those of service a business, environment, true the equipment grew pressured -- The . of this was

you. Got

the then is my of tolling a other super stuff. little in but the X/X then half the of couple And bit it's was just little follow-up of like over growth guess commercial then question, kind Okay. quarters, a and or nerdy, And so was last I filing, fleet.

This $X totaling growth about title that it actually then violations, and quarter, the was was all registration, fleet about looked of half stuff. other half million was like only

stuff compared this quarters. really I those big So maybe some the last that were quarter? quarter Am right? that to of on strong many And reading why was this things

We've XXX.X. right? to seen could relatively I a X -- been probably let's say year, of it, the is TSA talk about throughput to first XXX, there, messing you. last the in that story really think think XXX, For be best the the way we've quarters the up had not comps a year that I one-timer be that that. was we with on honest There's

T&R I racks So CS business to that. out registrations have tolling a to think call that there reporting side thus them. level, will story on follow I if back a seen to there's is all far tends is the so hear tease the I less violation be year. to the bring that and follow we one think that about you to probably don't can The thing the from that The little tends out. bit side But it of tomorrow, this total

it overall good, And you. like. was Got looks Yes. tolling

So I appreciate that all.

question the next from of line with Your Research. Northcoast Housum comes Keith

bit little a of fourth housekeeping off, in quarter. first of the terms Just

the in quantify kind headwind for you terms that's in the you quarter? presenting Florida hurricanes, what result terms the In of can guys of of disruption toll the of

Yes.

XX million Our through on I though I days upper $X betting the $X million. a of to -- million, that would best That's man why $X $X guess a that ago, is here. all that the it that. be to but probably even towards give range, million Keith, see I storm hit were will if can't around answer, you precise come end

terms ARR in of each about your just then both talk through having some international I perhaps nice David, of might international, Canada. out And just have business, you wins. -- it. think, the and segments go But Australia think and Appreciate today of Government is growing importance really it of and is the called mean, how I to . I of we about like I the what talking business, Australia. have continue strong of business? ultimately, Solutions in terms perhaps mean, we're compared the in it's rest you a to the lot -- principally,

that work South them. we X in Wales the largest growth. And continue in customers to of to -- continues with entire have our We New globe

of pad business horizon. say Government as really the Solutions would really, important I the use some work New We that sort a launching win Zealand. So to that's to in over

those talked our there. we so I think are but important we last quarter about call, still that -- on

-- is Obviously, still work pilots a multiple across which we've as principally racks we're some for remains -- as business Europe well to countries. continuing good commercial services, multiple

actually up Some for of are coming extension. those

about excited that. we're So

is We of have into things areas which tolling. the one going real big some of Italy,

see quarters, we're thought. So that as starting previous we've to mentioned in

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earlier? New competitors. you of the part of a Can we've larger City about you And appreciate I you. there ne that on? Crossing Got has Guard right be out . also that clarify question it last separate New are York you. perhaps it. guys doing for might City you think here for is that as been York I Do talking I Or your pilot proposal a proposal that your with working product understand

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You said pilot.

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a submittal. be second Yes, it would

the Faucette comes Morgan line Stanley. James next with And your question of from

This behalf James. is on a [indiscernible] asking of question

free much cash So strong -- to flow this great quarter. so see

return. to upon want So touch capital

bit into valuation I it? prepared just ways thinking you provided Any looking in what And this about for been you've a technology You looking little about in sectors. your of generally? of adjacent get be might and types remarks is looking in sense new a how space assets the pipeline, to want

Yes.

generally, core we the we position think as that both I still serve. to our the strengthen start products the the framework use is and by we as well is the our which with are in core able in which capital geographies at we same, to look

kind one. So number of that's

that's is X list. probably think number Number I of people's one most adjacencies.

we we we're aperture started really both as because So look markets software necessarily at of talked with slightly last that overlap customers as to things and broader well a technology. we government about public not there's recognize today. that of customers like lot but quarter a safety in and are kind different

areas the at what we call we're inside looking will today be of those So some that of mobility. urban

connected things look areas we that then fleet, And in continue fleet like management, fleet vehicle look continue to to for we and telematics payments and are software at.

Blair. next question comes line William with from of [indiscernible] the Your

This What's to, ended? the start winning on I has being pilot all, on on DiPalma. of congratulate the before now outside or awards announced is can pilot of To Noah San X for cities of and and that's the you awesome Francisco. cities rest wanted off, timing Louie more towns get California first That's awarded been news. the the

Yes.

included San are San language start What they to in I would think -- a as other see sort really why thought the on leader more That's of getting early. a anticipate -- that think jumped you'll Francisco you mean, template would use as were cities potentially submitted RFP I they in the legislation quite it. about as So it Francisco passed. as the pilot it was that

we're participate today, a could. we as are probably could for do of may think in that cities that the or they would acceleration to -- that named Outside strong But that than up that that legislation . in for are start all it the it. demand there's going certainly already And state late stands ones that open some that, think the so sooner cities legislation later those want to Sons shortly. there to I see new

Government Got Florida can little you business it. a terms . state of how in bit And of the in Solutions, development about looking then talk staying is activity?

talked as seen than continue. state continuing it's competitors as We I last we've lot remember there to some places. had there correctly. wins. in think was -- that still well of some other if We we're in I a more it competitors wins Yes, -- see It's quarter, -- a

So especially there, -- yes, but in about our some we feel overall, position procurements. the larger good . of very

one Got then great. it. That's just final question. And

. bit You mentioned a with about Can it $X an ARR involves that about little remarks your more in contract million you Hayden talk AI. what prepared and

Yes.

use. So capability Hayden have a partner. the to is outstanding They an they related that cameras

outstanding mobile their serving effectively to capability a they're we bus enforcement back-end front so technology. lane end for their processing as so with their are able and do And that

now questions concludes today's are This there at participating. all Thank no call. you And time. this conference further for

now You disconnect. may