Verra Mobility Corporation reported fourth‑quarter 2025 revenue of $257.9 million, a 16.4% year‑over‑year increase that beat consensus estimates of $241.7 million to $249.0 million. Adjusted earnings per share came in at $0.30, falling short of the $0.31–$0.32 consensus and marking a miss of $0.02 to $0.02. Adjusted EBITDA was $101.8 million, essentially flat against the $102.0 million reported a year earlier, and the adjusted EBITDA margin contracted to 39% from 46% in Q4 2024.
Revenue growth was driven largely by the expansion of the New York City red‑light camera program and continued demand in the company’s commercial services segment. The company’s three‑segment model—Commercial Services, Government Solutions, and Parking Solutions—continued to generate incremental revenue, but the mix shift toward lower‑margin government contracts and the high cost of deploying new camera infrastructure weighed on profitability.
Margin compression was attributed to higher costs associated with project implementation and New York City Department of Transportation readiness requirements. Management noted that “the decline in adjusted EBITDA margin was related to increased costs to support project implementations and NYCDOT readiness costs.” These additional expenses, combined with a portfolio mix that included more lower‑margin contracts, reduced the overall margin.
The EPS miss reflects the margin squeeze: while revenue rose, the higher operating costs and the need to invest in the MOSAIC platform and other technology upgrades eroded earnings. The company’s adjusted EPS guidance for 2026 remains in line with prior expectations, but the lower-than‑expected margin outlook tempered investor enthusiasm.
For 2026, Verra Mobility reiterated revenue guidance of $1.02 billion to $1.03 billion and adjusted EBITDA guidance of $405 million to $415 million. Management expects adjusted EBITDA margins to rise to the mid‑30% range in the first quarter and trend toward the high 30s to low 40s for the remainder of the year, targeting a 40% margin for the full year. This guidance signals confidence in continued revenue growth while acknowledging ongoing profitability headwinds.
Market reaction was negative: the company’s stock fell 9.1% in after‑hours trading, driven by the EPS miss, lower adjusted EBITDA guidance, and the margin compression highlighted by management. Investors weighed the strong revenue beat against the disappointing earnings and cautious outlook.
Overall, Verra Mobility’s Q4 results demonstrate robust top‑line growth driven by its flagship New York City program and commercial expansion, but the company faces short‑term margin pressure from higher implementation costs and a less favorable contract mix. The company’s focus on modernizing its MOSAIC platform and securing long‑term government contracts positions it for sustained growth, though profitability will likely improve only as the cost structure stabilizes and margin compression eases.
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