Verra Mobility at William Blair Conference: Strategic Growth Insights

On Wednesday, 04 June 2025, Verra Mobility (NASDAQ:VRRM) participated in the 45th Annual William Blair Growth Stock Conference. The company highlighted its robust financial performance and strategic growth plans, while addressing potential challenges such as fluctuating travel demand. CEO David Roberts and CFO Craig Conti emphasized the company’s market leadership and operational efficiency.

Key Takeaways

• Verra Mobility operates in three segments: Commercial Services, Government Solutions, and Parking Solutions.
• The company boasts a 95% recurring service revenue and a strong adjusted EBITDA margin of 45%.
• Strategic capital allocation includes investments in core business, M&A, debt repayment, and share repurchases.
• Projected 2024 growth includes a 6% increase in revenue and an 8% rise in adjusted EPS.
• The company maintains a conservative leverage ratio, providing flexibility for future opportunities.

Financial Results

Verra Mobility reported approximately $900 million in revenue over the trailing twelve months, with 95% being recurring service revenue. The company achieved an adjusted EBITDA margin of 45%, translating to $174 million in free cash flow. Current net debt stands at $950 million, with a leverage ratio between 2.2x and 2.4x. Key growth metrics include:

• Total Revenue CAGR since 2021: 16%
• Service Revenue CAGR since 2021: 18%
• Adjusted EBITDA CAGR over the last four years: 13%
• Projected 2024 revenue growth: 6%
• Projected 2024 adjusted EBITDA growth: 3%
• Projected 2024 adjusted EPS growth: 8%

Operational Updates

Verra Mobility continues to lead in its operational segments:

• Commercial Services: The company is the top provider of toll management solutions for commercial fleets in North America, collaborating with major rental car companies and integrating with 54 toll authorities.
• Government Solutions: Verra Mobility is the leading provider of automated enforcement solutions, with significant partnerships, including a renewed relationship with New York City. The number of states with automated enforcement legislation has nearly doubled in three years.
• Parking Solutions: The company offers a software platform for universities and municipalities to manage parking, projecting high single-digit growth in this segment.

Future Outlook

Guidance for 2024 includes a 6% revenue growth, driven by various factors:

• Commercial Services: Anticipated growth from GDP travel growth, expansion of toll roads, and cashless tolling penetration.
• Government Solutions: Expected growth due to the expansion of automated enforcement programs, with potential significant market expansion in California.

The company prioritizes capital allocation towards investments in core businesses, strategic M&A, debt repayment, and share repurchases, focusing on organic growth.

Q&A Highlights

During the Q&A session, management addressed several key points:

• Travel demand remains flat year-to-date, with the company comfortable with its guidance even if travel declines slightly.
• Growth drivers for Commercial Services include travel growth, toll road expansion, and cashless tolling penetration.
• Automated enforcement programs are expanding, with a notable pilot program in California potentially leading to a statewide rollout.
• The company maintains a leverage target of three times, prioritizing shareholder returns and strategic flexibility.

In conclusion, Verra Mobility’s detailed strategic plans and robust financial performance position it well for future growth. For more details, refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

David Roberts, CEO, VeriMobility: You said I’ll stand. Or I’ll wait till Lou’s gonna intro intro us first.

Louie DiPalma, Equity Research Team, William Blair: Great. Good afternoon. I am Louie DiPalma. I cover Smart City Technologies on William Blair’s equity research team. This is day two of the forty fifth annual William Blair Growth Stock Conference.

We’re pleased to be hosting a hybrid presentation fireside chat with the management team of VeriMobility. Joining me today are CEO, David Roberts CFO, Craig Conti and head of investor relations, Mark Zindler. This is VeriMobility’s fifth year attending our Growth Stock Conference. I’m required to inform the audience that a complete list of disclosures and potential conflicts of interest are available on our website at WilliamBlair.com. And following the presentation, there will be a a breakout session in the Adler Room.

So thanks guys for for joining us. And, David

David Roberts, CEO, VeriMobility: Sure. I’ll take it away. Well, hello. I know all of you are super excited to learn everything you can about photo enforcement and tolling, and there’s no better way to spend your afternoon. So I’m excited to tell you about VeriMobility.

I’m David Roberts. I’m the CEO. I’ve been with the company a little over eleven years. So I was with the company when it was previously privately held. Privately held then we went to private equity.

And then private equity, believe it or not, we went public via SPAC. So we’re one of the few good guys that actually made it out of that. I heard SPACs are making a comeback, in fact. So, I’m gonna treat this as if you don’t know much about the business. I know some of you know a lot about our business, and we appreciate the attention that you’ve given us.

But I wanna try to do it at the highest level, and then I think Craig’s gonna come up in a little bit to talk through some of the financials, and then, Louie will do some q and a for us as well. So what’s the shape of the company? We are a global leader in smart mobility. Over on the left hand side of the slide, what you see is just a view of the kind of rough financials. What you’re seeing there is TTM revenue.

So call it roughly a $900,000,000 business that is revenues generated by three separate business units. I’m gonna go through each of those in just a minute as well as what they do and how they make money. So I’ll give you the information around that. You can see that 95% of that is service revenue or re recurring or reoccurring revenue. So very consistent revenue, high level of visibility into our financial performance, which is a great aspect of our business.

And perhaps the one that is most exciting is our adjusted EBITDA margins of 45%. So highly cash flow generative, 43% free cash flow conversion. Last 12, a hundred and $74,000,000 of free cash flow. We do generate a lot of cash. We use that to reinvest in the business.

We we also buy back a lot of our shares. If you look at our history since going public, we’ve bought back a pretty good chunk of our shares as well. So we’re very shareholder friendly when the use of that cash. We operate in 17 countries around the world, mostly in Europe. We also operate our automated enforcement business via acquisition in Australia, New Zealand, and Canada.

We have around 1,900 employees that do that work on behalf of our 2,300 customers. So great business, bright future, excited to be talking about it today. Let me walk through a look. You’ll actually be more familiar. If you don’t know the business, you’re probably when I get through this, you might be a customer of ours and not even know it.

So I I look forward to seeing if that’s true or not. Number one in commercial services. In commercial services, we are the number one provider of toll management solutions for commercial fleets in North America. That is principally with rental car. So if while you were here and perhaps even on your way from O’Hare, you rented a car from Hertz, Avis, or Enterprise, and you ran a toll, then we were a part of your journey.

Because everything related to toll management or toll, paying a toll authority for those three rental car customers is through Veramobility. How does that work? We have integrations with the 54 toll authorities across the country that allows us to put vehicles on our account. So when they incur a toll, we pay that toll to the toll authority immediately. And then when you turn your rental car back in at the end of your rental agreement, we gather all those tolls and those costs plus the administration fee, and we bill you your credit card via the rental card the rental agreement that you have.

So yeah. And if you look at rental card, again, we have the big three here. We also work with them in Europe as well. The rest of that business, we work with fleet management companies. So if you’re familiar with companies like Element or Donlin Wheels, where they procure vehicles on behalf of corporations.

We put tolling and violation management solutions as well as title and registration, as well. So that’s the commercial service business predominantly operates here in The United States. Although several years ago, we did some acquisitions inside of Europe to to take our tolling and for rental car into Europe. So we have an we operate out of London and Amsterdam where we’re working with several pilots across different parts of Europe. That’s been a slower moving aspect of our growth story, but, that’s that business overall has you can see great margins, great growth.

It’s it’s a really, really good business. Question in your mind is what about all the travel that we’ve heard here in The United States? What’s the impact to us? We are clearly impacted by travel, but we have a lot a lot of our growth that is not necessarily correlated with travel. So it, while it certainly impacts us, it doesn’t impact us quite as much as you may think.

And if there’s a question on that, we’re we’re glad to entertain that in the follow-up session. Craig can handle that. So anyone ever rent a car and run a toll? Anyone? Okay.

Good to see your customers. Thank you. Appreciate your business. Has anyone ever gotten a red light ticket, a speeding ticket, or a school bus stop arm ticket from a camera? Anyone here?

Thank you for your business. Please slow down and drive carefully. We are the number one provider of those solutions in North America, so we partner with cities all across North America to create safety solutions in their communities via automated enforcement. Again, that shows up as red light cameras in intersections, speed cameras in places like school zones and work zones, and school bus stop arm cameras. So in, many states, we wherein a school bus is in operation and the arm is extended and the lights are on, you would be surprised at the number of vehicles that continue to travel by on the opposite side when children are trying to get on the bus.

We issue violations to those offenders as well. That business has been absolutely knocking the cover off the ball the last several quarters. Most recently, as we announced publicly, we renewed our relationship with New York City. New York City is the largest automated enforcement program in the world, over 3,000 intersections and cameras that they use today. We can’t really talk much about it because we’re still under what’s called a private procurement, but we they have announced it, so we can announce it that we’ve been awarded the tender.

We’re in the final stages of wrapping up our contract, and we’ll be able announce the terms of that in the next in the next few months, I would imagine, but very excited. The other unique aspect of this business, this business is effectively the the it is kind of prewired via legislation. Meaning, to have automated enforcement, you have to have legislation at a state level that allows you to a city to choose to do it. So when we what we call open up legislation, we work with state and local lobbyists to create legislation to allow for enforcement. So when we do that, we are, creating TAM or SAM for the for the business to go sell them.

We have opened up more of that SAM or, excuse me, TAM in the last three years than we did in the previous eight four. We when we went public, we had 21 states that had automated enforcement. We now almost have 40. So it gives you an idea of where local police, local community politicians are leaning toward these for community safety. And then finally, our parking business, which was an acquisition we did a couple years ago.

Two primary customers there, we work with universities. We provide a software platform for them to manage, their permitting and the, ticketing for the students and the people that are getting the different types parking in the universities. I didn’t I have three kids in college. I didn’t know this was a thing until my kids started giving me their parking tickets, and I realized why this is a problem. So it’s a problem that we solve that I’m happy to be a part of.

We also work with municipalities on the enforcement of parking, the permitting, and the enforcement of parking as well. Gives you a sense of that business. So overall, a great portfolio of very mobility focused businesses that have continued to be really successful. So so how do we win? What’s the differentiation?

We have a saying that we wanna serve our customers at the highest point of their needs. So you would see of the 1,900 employees that you saw on the earlier slide, many of those are very focused on our customers, how we serve them, the quality of our service, what else can we do for you? Many of our acquisitions and things that we’ve done have been the result of directly our We take a look and decide that that’s a good idea or or or not in some cases. But we look at our renewal rates, 95% plus across the business. So very, very strong customer relationships, long dated contracts, so very consistent sources of revenue.

We look at based upon those relationships, we create differentiated solutions, as I mentioned, whether that’s getting into parking, whether that’s getting into the title and registration business that we’re in. Those are all driven by customer inquiry and customer opportunities. We’ve used m and a in the past. We’ve done five or six acquisitions over the since we’ve gone public, including Redflex and t two. T two is the parking business.

Redflex was a competitor in the, automated enforcement space that was based in Australia, so that allowed us to go global with our capabilities. Previous to that, we were US only. And then we connect all these businesses together. While all of the businesses are under the umbrella of mobility, we really operate them as independent portfolio companies. So think in the likes of companies like Danaher or Affordive where they put a lot of autonomy at the hands of the business so they can react quickly to what the customers do, but we connect them by a common business system, which we call the VeriMobility operating system, which is this is how we make sure that we are driving KPIs, that we are driving operational efficiency and continuous improvement.

All businesses run that exactly the same while their customers and their products and services are somewhat different. Overall, in terms of the the great part about our business is we’re without doing acquisitions, we are staged for growth in the business that we have today. Our our core businesses are doing very well. As I mentioned, our government solutions business in particular right now is really enjoying a tailwind of growth and opportunity given its market position as well as the dynamics in the market. You can see across the bottom that the expectation of what those growth algorithms look like is a high single digit growth in commercial services, our expectation.

Mid single digit plus, for government solutions, especially nowadays, and then ultimately getting to high single digit for parking on our software and our hardware businesses there. And all of that is has the capacity. We can use m and a when we need to, but we’re not looking to do deals that we don’t need to do. We’ll because we’ll redeploy that via share repurchases or just continue to invest in the great businesses that we already have. The management team, awesome team, world class engagement scores in the upper seventies if you look at Clint surveys and things like that.

So we’ve maintained a 77 or greater. So we have a strong culture committed to customers, considered to high committed to high values, and it’s driven by this leadership team here. And with that, one of them is gonna come up and talk a little bit more about the financial profile, which is Craig, our CFO. Thanks, David. There you

Craig Conti, CFO, VeriMobility: go. I appreciate that. Yeah. And thank thank you to all of you for being here. You know, one of the things I like to kick off, and I want you to hear me say this, and I know I speak for David, so we compete for investors.

We compete for investors. Right? That’s what we’re doing here. And I I’m gonna walk you through why I think our story is pretty good. But remember, that that that’s what we’re here to do.

So if we look at the total revenue of the business, David just gave you an overview of what we do. Total revenue CAGR since 2021 coming in at about 16%, service revenue CAGR at 18%. And as David mentioned, we’re rounding up on a TTM basis to just under $900,000,000. 90 5 percent of that revenue is service revenue, and that’s primarily recurring or reoccurring revenue. We’re really proud of that revenue base.

We move over to the profitability and free cash flow. Sorry. I gotta arch to see my own numbers here. You know, our adjusted EBITDA CAGR still double digit at 13%. For the last four years, it’s been right around that 45 to 46% adjusted EBITDA.

So high margin, high differentiation in our products. Very proud of that. And on a free cash flow conversion, David gave you the absolute numbers, but the way I like to quote this is a conversion of adjusted EBITDA. This is gonna come into play when I talk about leverage and capital allocation in a minute. We typically convert between 35 to 45% of free cash flow this year.

I expect to be on the higher end of that, so 40 to 45% free cash flow conversion. And that’s been real that’s even while we’re investing in the growth of the government solutions business that David mentioned earlier. So, again, very cash accretive that allows us to do a lot of things, and that’s why I wanna talk about how we differentiate ourselves with capital allocation. So quickly on the balance sheet, I took a snapshot here of the, the first quarter. So we closed with about a hundred million dollars of cash on the balance sheet.

We’ve got about a billion dollars of debt. That billion dollars of debt, 700,000,000 of that is float at sulfur plus two twenty five. That’s a covenant light term loan b for my structured finance friends in the room. Pretty good fighting weight for a company of our size. And we’ve got 350,000,000, fixed at, just about 6%, a little less than 6%.

So that’s our debt stack. On a net debt basis, that brings us down to 950. And take a look at our leverage in the upper right hand corner. We’ve hovered around two two to two four. Now if you’ve listened to the company talk before, I talk about our target leverage.

When we did our investor day back in 2022, the target leverage for the company was three and a half times, I said we compete for investors. So as we went out in 2023 and 2024 and everyone saw what happened with interest rates, we took the target leverage to the company of the company down to three times. I’m running below three times. Simply what that means is we are not going to lever up to our target leverage just to do so. We’re gonna make sure we’re allocating the dollars where they’re best served.

And then finally, on our debt maturity side, all of our debt is long dated. Our first maturity doesn’t come out till, 2028. So that’s the balance sheet. We publish this slide every quarter. So when we post our earnings deck, if you wanna learn more about the company, obviously, our earnings call is a great thing, but we do the, investor presentation.

And this slide is in there. We update it every 90 days. My favorite slide that we do. This is what I think is our differentiator. How do we spend that free cash flow that I just showed you on the last page?

The first dollars out the door always are gonna be unlikely. We’re gonna invest in our core business. That’s CapEx. The CapEx for Verra Mobility excuse me. Two thirds of these dollars is what I call revenue generating CapEx.

So in the government solutions business, the photo enforcement technology that the municipalities use is actually funded by Vera Mobility and remains on our balance sheet. So this is not CapEx hoping for a return. This is CapEx as a result of a commercial agreement, and then the balance is is software, capitalized software. If you look over the balance of the last five years, we spent, you know, a billion dollars on strategic m and a. David walked you through a few of those deals, but we haven’t done a deal since the end of twenty twenty one.

December ’20 ’20 ’1 was our last deal. We’ve continued on our journey of capital allocation on what makes the most sense in return for our investors. And the way I think about it is is this. I can’t tell you what’s gonna happen in six months, but I’ll tell you exactly how Variability is gonna allocate their cap. We’re gonna common size our cash flows, and we’re gonna put it towards what is the best return at that moment in time.

And given the free cash flow of the company, we get to make that decision every sixty days. So here’s what we’ve done as of recent. We’ve paid down about $250,000,000 worth of debt. My term loan b, as I said, was covenant light. We could do that dollar for dollar at our option without penalty, and we bought back over half a billion dollars of shares.

And if you saw recently, we put out an eight k. We have a new $100,000,000 authorization from our board, and we’ll see if and when that makes sense. Capital allocation, I want you to think about that as a differentiator for the company as we get into q and a. If you have any questions, I’ll be happy to answer them. And then finally, the outlook for the year.

So this is the exact same outlook we put up in, February, and we maintained it through the first quarter. We expect about 6% growth on the top line. That’s on the lower end of our long term rubric. Back at our investor day, we talked about this is a business that’s gonna grow six to 8% organically year on year at over term. The reason that it’s six percent and not somewhere near the higher end of that range is 17% of our business is New York City.

New York City, as we said, we renewed, but we’re still in contract renewal. I have that factored in as flat. So with 17% of my business flat, we’re still hitting 6% growth, and I still think that’s the right number. Adjusted EBITDA up about 3%. We have some investment coming in this year when I put in a new ERP.

Happy to say that the thrust of that spending is behind us. We just closed our first month on the new system. It’s Oracle Fusion. It’s working fine. And about 8% growth at the midpoint for adjusted EPS.

I don’t wanna touch on just one thing that David said, I I think he said well in his presentation talking about well, a question we get a lot, what about travel demand? What about travel demand? If I look at the if I look at the hotel companies, if I look at the airlines, a lot of folks pulled their second half guidance. Right? You saw that in q one.

We decided not to do that, and here’s why. We are exposed to travel. Of course, we are, but it’s nowhere near even 50% of the business. And if I think about what the impact of that travel could be, as I sit here today, travel’s about flat. Year to date, it’s about flat where it was last year.

If I look at the second half of the year, if travel stays flat, even if it goes down on a couple points, I can still be in that range. Travel goes down more than that, obviously, we’re gonna have to have a different discussion, but that’s how I think about the rubric and the guide. And then finally, I just wanted to wrap with a couple high level comments that I think Louis might have a few questions that hopefully will address some things that are on your mind. You know, we’re we’re the global leader in each of our three markets. Dave will walk you through that.

We’re well positioned in each of these businesses. These businesses have large, long term, durable, secular tailwinds. We’re very proud to participate in them. I talked about our cash flow. And what’s not on the page, but I really want you to think about it’s not about the cash flow we generate, what we do with that cash flow.

Take a look at that wheel and look at how we allocate that capital. And then finally, I’m proud to be a member of this team, and I think we got the right team to execute on the markets that we’re in. So, again, thank you for coming. Thank you for having us. Let’s hear what’s on your mind.

Louie DiPalma, Equity Research Team, William Blair: Yeah. So, following up on what you just said, regarding if travel were to decline by 1% to 2% that you’re still comfortable with the guidance range? Is that how we should interpret it?

Craig Conti, CFO, VeriMobility: That that is the way you interpret it, and I think that that’s a second half number. Yeah. Because the the the question you know, David and I and Mark, we tried to think of, well, what would I ask if I were buying the stock of this company? And it’s you know, the airlines have said we could see some, you know, turbulence, excuse the term, right, in the back half of the year. And the best I could do is kinda draw a box and say, if that turbulence gets to this level, we’re still good.

Clearly, if the market gets worse than that, we’re gonna have to relook at it. Yeah. So that’s where we’re at.

Louie DiPalma, Equity Research Team, William Blair: Yeah. And to, like, benchmark it with investors, what are what is the algorithm in terms of how your commercial division is able to outpace travel volumes such that should we assume that there’s a general 6% outperformance or 5% outperformance? Or how do you think about that and Yeah. All the moving parts?

Craig Conti, CFO, VeriMobility: Yeah. I’ll take it numerically, then David may may cap on that strategically for sure. So here here’s the shape of that question in the past has been this, is if travel’s a GDP grower, and let’s take a developed developed world GDP of two and a half percent just for example, and it’s going to be that every year for the medium term, how can you have this business that grows high single digits? And I you know, as David said, this is a high single digit organic grower. Well, the way I think about that growth is a third, a third, a third.

So a third of it is GDP travel growth. Right? Now that may happen, that may not. The other third are secular tailwinds, which are durable secular tailwinds. The way I think about that is toll roads in The United States.

On average, we add 10 to 20 toll roads in The United States per year. Last year, it was 20. 90 five percent of the rental cars in United States are under our contract of are under contract of Vero Mobility. So, clearly, as we had toll roads, that’s a boon to the company. And I didn’t have to do anything incremental to receive that boon.

And then finally, it’s the, on on this on this third is the penetration of cashless. Right? So 70% of the roads in The United States Of America are cashless. There’s 30% left to go. When a road goes cashless, our renter is automatically opted into our program and is going to use the program.

So as that penetration continues, that’s a tailwind. So that’s a second third of the growth. The remaining third are what I would say would be more standard growth initiatives. This is our penetration of the fleet business, which is doesn’t have anything to do with travel. Right?

It has, the title and registration business and our growth in Europe. So that’s how we think A third, a third, a third to get from zero to high single digit. If one of those thirds goes to zero, then you’re left with the remaining two thirds. Right.

Louie DiPalma, Equity Research Team, William Blair: And should we think of it as, like, 5%, six % in terms of outperformance? Or Yeah. That it

Craig Conti, CFO, VeriMobility: it it’s tough it’s tough to give that it’s tough to give that number. Now let let me tell you why. I I can’t give you that specific of a number. The TSA throughput is a great indicator of of our business. One thing I’ve been saying to the folks in the room today is if you regress that with, with with with commercial services revenue, you get a r squared point eight.

So it’s very closely correlated. Right? But the TSA, two thirds to three quarters of our revenue is in five states. We’re sitting in one of those states today, Florida, California. You could guess what they are, you know, Texas, New York.

So if TSA tends to if TSA is 2%, but it’s 4% growth somewhere that doesn’t have toll roads, it doesn’t necessarily impact their mobility. Still, there’s some variability there, but over the medium term, I think that’s the right rubric, Lloyd.

Louie DiPalma, Equity Research Team, William Blair: You’re saying I need to get better data.

Craig Conti, CFO, VeriMobility: Good luck. I haven’t found it yet, they’ll find out.

Louie DiPalma, Equity Research Team, William Blair: No. That was that was insightful. And another question that’s popular on investor minds relates to the rollout of red light camera and speed camera services in some of the new markets that have passed legislation. And, David, I think you said that from the time you you started to recently, it went from 21 states to to 40 states, and two of the big states are Florida and and California. And so can you provide some type of status update in terms of how, those markets have progressed?

Yeah. So, just to give you, California is a really unique state in as much

David Roberts, CEO, VeriMobility: it it had red light camera previously, but candidly, it was deployed poorly. The legislation was quite poor. The the recidivism rate was low. It it just wasn’t done well, and they’ve done some work to fix that. They’ve also added a pilot for school zone speed.

So there’s six six cities that have an opportunity to add a a fixed number of cameras. There’s a five year pilot that’s been allowed. If the if the returns of that and the metrics that you would anticipate around safety are achieved, then they you would look to see a large state rollout. That goes from a TAM of, you know, $10,000,000 to a hundred million dollars very quickly. We would anticipate that California would roll out much faster than that, so it would go statewide probably in the next two years.

One RP has been, issued and awarded. San Francisco, it was awarded to us. There are two others, which we’ve also bid on, one Oakland, one San Jose, which we haven’t quite heard about yet, but, you know, feel good about our we we are we think we’re very well positioned there. The other state you mentioned is Florida where we recently won a re won Orlando, which is a very large city. We’ve also won a couple of school bus stop on there.

So the competition certainly has been more fierce in Florida than in California, but we are given the the backlog of ARR that we have, we feel like we’re in a really doing a really good position on the growth of the business outside of New York.

Louie DiPalma, Equity Research Team, William Blair: Great. And you, you indicated that you’re you’re knocking the cover off the ball. And does that is that a reflection of both your competitive win rate and also the fact that there is this industry momentum? And and for that industry momentum, what’s driving all of these states to adopt I mean,

David Roberts, CEO, VeriMobility: the second part of your question, in short, their mobility. Yeah. Meaning, we avail ourselves of the political process through state and local lobbyists to make sure that there are legislative legislators that are aware of the benefit of automated enforcement and that they’re promoting legislation that allows cities to make a choice on how to protect the citizens in their community. We do that in all the states. We also protect it when others might say, we don’t want this type of legislation.

So we’re we’re on both sides of that. When I say we’re knocking the cover off the ball, it’s, one, we’ve opened up so much TAM in two years because of the efforts of our team, and the local legislators, which allows us to then go sell our products. And then the second part is our win rate against that has been so high, especially in what we would just consider larger municipalities, which is the we tend to do better in the larger municipalities. We we’ve been winning more than our fair share, which is consistent with close to our

Louie DiPalma, Equity Research Team, William Blair: market share. And and would you say, that in general, there may be an increasing acceptance of of robotics in terms of photo enforcement? Because previously, there was a perception that, you know, if somebody were to receive a ticket, they think that there’s an unfairness associated with receiving a ticket from a machine. But increasingly, you know, on the front page of the Wall Street Journal, there was a story. It said, I think we’re in, like, Waymo’s world.

And with with with Tesla, there’s a lot of there’s, you know, the potential for the rollout of of full self driving in Austin this month. And so there’s robotics is a big theme right now, and and you guys play into this robotics theme. And but has there been an increasing acceptance that’s carrying over to how robotics can help with safety and is Yeah.

David Roberts, CEO, VeriMobility: I would say, two things. One is there’s certainly, robotics notwithstanding, certainly technology as a force multiplier for police is something that’s very accepted. It’s very difficult to recruit and retain police officers right now, so taking the ones you have and deploying them against the highest leverage crime is is exactly what cities wanna do. Our technology is a is a multiplier effect for that. I would also say too that, there whether it’s robotics or not, certainly images, people are getting a lot more used to images because that’s all they see on their phones all day long.

My daughter takes more pictures of herself before noon than I’ve probably taken in a year, so there’s just a lot of that going around. And so I think the image aspect or a picture being available, that used to be one of

Louie DiPalma, Equity Research Team, William Blair: the big concerns that seems to have abated a bit. Nice. Yeah. I’m trying to envision yourself taking selfies. I don’t yeah.

David Roberts, CEO, VeriMobility: I probably struggle to take a selfie. Yeah.

Louie DiPalma, Equity Research Team, William Blair: Another question. For for for Craig, as it relates to the the leverage target, you mentioned how it went from three and a half to to three times, and now I think you’re at 2.2 times, but you announced the $100,000,000 buyback. Right. How how serious are you about the three times leverage target? Is are you trying to preserve the optionality in terms of if there are attractive, you know, m and a targets out there?

What is your view then?

Craig Conti, CFO, VeriMobility: The the view of that is absolutely yes. And, you know, three three times, by the way, is the level flight path. That’s not the maximum. Right? The maximum could pop above that, then we would try we would not try.

We would delever down to the three times. Right? So that’s the way we think about it. And, you know, again, it’s given the cash flow generation of the company, we look at all the levers of capital deployment all the time. And I could tell you, you know, we we have a full time team that works on m and a.

M and a has been very successful for us in the past, but we won’t do a deal just to do a deal. And I think, you know, we’re happy to happy to tell you that.

Louie DiPalma, Equity Research Team, William Blair: Great. I think that is all the time we have for this main session. So thank you, David and and Craig, and we are going to resume all

David Roberts, CEO, VeriMobility: for attending.

Louie DiPalma, Equity Research Team, William Blair: Yes. Thank you. We’re gonna resume this conversation in the Adler Room on the Second Floor. So thanks, everyone.

Craig Conti, CFO, VeriMobility: This presentation has now finished. Please check back shortly for the archive.

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