# VERRA MOBILITY Corp: Form 10-Q for the period ended Jun 30, 2025

- Company: [VERRA MOBILITY Corp](/companies/vrrm.md) (CIK 1682745)
- Form: 10-Q
- Filed: 2025-08-06
- Accepted by EDGAR: Aug 6, 2025, 16:57 ET
- Period: 2025-06-30
- Accession: 0000950170-25-104192
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1682745/000095017025104192/vrrm-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1682745/000095017025104192/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $236.0m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $459.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Selling, general and administrative | 3 months, 2025-04-01 to 2025-06-30 | $48.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2025-01-01 to 2025-06-30 | $100.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | $63.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | $120.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $16.6m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $33.2m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $14.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $26.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $38.6m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $70.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.24 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.44 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.24 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.44 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 161,543,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 161,804,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $138.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $56.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 6 months, 2025-01-01 to 2025-06-30 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-06-30 | $147.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $475.1m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $1.70bn | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $208.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $1.34bn | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $1.03bn | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2025-06-30 | $352.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 50,734 characters.

*The following discussion and analysis of our financial condition and results of operations should be read together with our Annual Report, and our financial statements and the related notes included in Part I, Item 1 “Financial Statements” of this Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Please refer to the section in this Report entitled “Cautionary Note Regarding Forward-Looking Statements.”*

### Overview

We are a leading provider of smart mobility technology solutions, principally operating throughout the United States, Australia, Europe and Canada. We make transportation safer, smarter and more connected through our integrated, data-driven solutions, including toll and violations management, title and registration services, automated safety and traffic enforcement and commercial parking management. We bring together vehicles, hardware, software, data and people to solve transportation challenges for customers around the world, including commercial fleet owners such as rental car companies (“***RACs”***), direct commercial fleet owner-operators (“***Direct Fleets”***) and fleet management companies (“***FMCs”***), as well as governments, universities, parking operators, healthcare facilities, transportation hubs and violation-issuing authorities. Our vision is to continue to develop and use technology and data intelligence to make transportation safer, smarter and more connected globally.

### Our Segments

We have three operating and reportable segments, Commercial Services, Government Solutions and Parking Solutions:

- Our Commercial Services segment offers toll and violation management solutions and title and registration services for commercial fleet customers, including RACs and FMCs in North America. In Europe, we provide tolling and violations processing services.
- Our Government Solutions segment offers photo enforcement solutions and services to its customers. We provide complete, end-to-end speed, red-light, school bus stop arm and bus lane enforcement solutions. Our international operations primarily involve the sale of traffic enforcement products and recurring maintenance services related to the equipment and software.
- Our Parking Solutions segment provides an integrated suite of parking software, transaction processing and hardware solutions to universities, municipalities, commercial parking operators and health care facilities in the United States and Canada.

Segment performance is based on revenues and income from operations before depreciation, amortization and stock-based compensation. The measure also excludes interest expense, net, income taxes and certain other transactions and is inclusive of other income, net.

### Executive Summary

We operate under long-term contracts and a reoccurring service revenue model. We continue to execute our strategy to grow revenue organically year-over-year and focus on initiatives that support our long-term strategy. During the periods presented, we:

- Increased total revenue by $27.1 million, or 6.3%, from $432.2 million in the six months ended June 30, 2024 to $459.3 million in the same period in 2025. The increase was mainly due to service revenue resulting from increased travel volume in the Commercial Services segment and the growth from bus lane and school bus stop arm enforcement programs, back-office software-as-a-service (“***SaaS”***) programs and higher product sales in the Government Solutions segment.
- Generated cash flows from operating activities of $138.1 million and $74.4 million for the six months ended June 30, 2025 and 2024, respectively. Our cash on hand was $147.7 million as of June 30, 2025.
- Lowered interest expense by $5.3 million for the six months ended June 30, 2025 compared to the same period in 2024 due to debt refinancing in fiscal year 2024, further discussed below.

### Recent Events

#### NYCDOT Contract

On March 31, 2025, the City of New York Department of Transportation (“***NYCDOT”***) announced that it identified the Company as the vendor to manage New York City’s automated enforcement camera safety programs for an expected five-year period after our current contract expires in December 2025. The New York City automated enforcement program remains an active procurement. We are currently engaged in contract negotiations with NYCDOT and if the contract terms and pricing are materially different from our current contract, or if the parties ultimately fail to consummate a new agreement, it could have a material adverse effect on our business, financial condition and results of operations.

#### Amendment to the Revolving Credit Agreement

On May 15, 2025, we entered into a fourth amendment to the Revolving Credit Agreement (the “***Revolver”***) which increased the existing commitment from $75.0 million to $125.0 million available for loans and letters of credit. The remaining terms of the Revolver were unchanged including the maturity date of December 18, 2026. There were no outstanding borrowings on the Revolver as of June 30, 2025 or December 31, 2024. The availability to borrow was $123.9 million, net of $1.1 million of outstanding letters of credit at June 30, 2025.

#### Share Repurchases and Retirement

In October 2023, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A common stock, par value $0.0001 (the “***Class A Common Stock”***) over an 18-month period. After we repurchased an aggregate 3.5 million shares for approximately $87.3 million in fiscal year 2024, in December 2024, our Board of Directors authorized the repurchase of up to an additional $100 million of our outstanding shares under the then-existing program, providing us with approximately $112.7 million available for repurchases. On December 11, 2024, we entered into an accelerated share repurchase (“***ASR”***) agreement with a third-party financial institution and paid $112.7 million to receive an initial delivery of 3,821,958 shares of our Class A Common Stock. The final settlement occurred on March 3, 2025, at which time, we received an additional 685,934 shares calculated using a volume-weighted average price over the term of the ASR agreement. All repurchased shares were subsequently retired. The authorization under this share repurchase program ended on April 30, 2025.

On May 17, 2025, our Board of Directors authorized a new share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock. Under the repurchase program, we may purchase shares of Class A Common Stock until November 2026 through open market purchases, in privately negotiated transactions or by other means, including trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, and ASR agreements, each as permitted under applicable rules and regulations. The amount and timing of repurchases will be determined at our discretion and will depend on a variety of factors, including price, general business and market conditions, applicable legal requirements, and alternative investment opportunities. The repurchase program does not obligate us to acquire any particular amount of Class A Common Stock or at any specific time intervals and may be modified, suspended or terminated at any time at our discretion. We have not yet repurchased shares of Class A Common Stock under this program.

#### New Corporate Headquarters Lease

On May 29, 2025, we entered into a lease agreement for our new corporate headquarters building in Mesa, Arizona and began recording lease expense when we obtained access to the building to begin tenant improvements. Accordingly, we modified our existing corporate headquarters lease term to end in early 2026 when we expect to relocate to the new building.

### Key Factors Affecting Our Results of Operations

We believe that our performance and future success depends on a number of factors that present opportunities for us but also pose risks and challenges, including those discussed below and in our Annual Report on Form 10-K titled “Risk Factors” and in Part II, Item 1A of this Quarterly Report.

#### Macroeconomic Conditions

Our business is susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations. The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: the inflationary impact on items such as wages and travel-related costs, future travel demand, legislation regarding the adoption, expansion or prohibition of automated enforcement and traffic safety technology by local, state or national governments, and the impact of the government regulations and actions, including tariffs and trade protection measures. We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, financial condition, and results of operations.

#### Travel Demand

Our Commercial Services segment is largely impacted by its customer demand which in turn is impacted by a variety of factors including seasonality, demand for business and leisure travel, reductions in the level of air travel, higher airfare costs, increases in energy prices, general international, national and local economic conditions and cycles, and consumer confidence, as well as other factors affecting travel levels, such as military conflicts, terrorist incidents, natural disasters and epidemic diseases.

We monitor the Transportation and Security Administration passenger volume (“***TSA Passenger Volume”***) as one of several measures for Commercial Services revenue growth. TSA Passenger Volume measures the number of passengers screened by the TSA at United States airports, which correlates to the number of vehicles rented by travelers and toll road usage. TSA Passenger Volume in the second quarter of 2025 was about 1% less than TSA Passenger Volume for the same period in 2024.

#### Electronic Tolling Penetration

Our Commercial Services segment, which offers automated toll and violations management solutions to fleet customers, is impacted by the number of toll roads in the United States and Europe and the geographic concentration of such roads. We monitor the expansion and penetration of toll roadways across the United States and Europe and the percentage of toll roads that rely on cashless or all-electronic infrastructure.

#### Enabling Legislation

Our Government Solutions segment is positively impacted, in significant part, by enabling legislation that permits photo enforcement programs at the federal, state and local level in the United States. Accordingly, we depend on national, state and local governments authorizing the use of automated photo enforcement and not otherwise materially restricting its use.

### Primary Components of Our Operating Results

### Revenues

*Service Revenue.* Our Commercial Services segment generates service revenue primarily through the operation and management of tolling programs and processing violations for RACs, FMCs and other large fleet customers. These solutions are full-service offerings by which we enroll the license plates of our customers’ vehicles and transponders with tolling authority accounts, pay tolls and violations on the customers’ behalf and, through proprietary technology, integrate with customer data to match the toll or violation to the driver and then bill the driver (or our customer, as applicable) for use of the service. The cost of certain tolls, violations and our customers’ share of administration fees are netted against revenue. We also generate service revenue in our Commercial Services segment through processing titles and registrations.

Our Government Solutions segment generates service revenue through the operation and maintenance of photo enforcement systems. Revenue drivers in this segment include the number of systems installed and the monthly revenue per system. Ancillary service revenue is generated in our Government Solutions segment from payment processing, pass-through fees for collection expense, and other fees.

Our Parking Solutions segment generates service revenue mainly from offering software as a service (“***SaaS”***), subscription fees, professional services and citation processing services related to parking management solutions to its customers.

*Product Sales.* Product sales are generated by the sale of photo enforcement equipment in the Government Solutions segment and specialized hardware in the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.

### Costs and Expenses

*Cost of Service Revenue, Excluding Depreciation and Amortization.* Cost of service revenue, excluding depreciation and amortization consists of recurring service costs, collection and other third-party costs in our segments.

*Cost of Product Sales.* Cost of product sales consists of the cost to acquire and install photo enforcement equipment purchased by Government Solutions customers and costs to develop hardware sold to Parking Solutions customers.

*Operating Expenses*. Operating expenses primarily include payroll and payroll-related costs (including stock-based compensation), subcontractor costs, payment processing and other operational costs, including print, postage and communication costs.

*Selling, General and Administrative Expenses*. Selling, general and administrative expenses include payroll and payroll-related costs (including stock-based compensation), real estate lease expense, insurance costs, professional services fees and general corporate expenses.

*Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net*. Depreciation, amortization and (gain) loss on disposal of assets, net includes depreciation on property, plant and equipment, and amortization of definite-lived intangible assets. This line item also includes any one-time gains or losses incurred in connection with the disposal of certain assets.

*Interest Expense, Net*. This includes interest expense and amortization of deferred financing costs and discounts and is net of interest income.

*Gain on Interest Rate Swap.* Gain on interest rate swap related to the changes associated with the derivative instrument re-measured to fair value at the end of the reporting period and the related periodic cash receipts or payments.

*Loss on Extinguishment of Debt.* Loss on extinguishment of debt consists of the write-off of pre-existing original issue discounts and deferred financing costs associated with debt extinguishment.

*Other Income, Net*. Other income, net primarily consists of volume rebates earned from total spend on credit card transactions, gains or losses on foreign currency transactions and other non-operating expenses.

### Results of Operations

### Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The following table sets forth our statements of operations data and expresses each item as a percentage of total revenue for the periods presented as well as the changes between periods. The tables and information provided in this section were derived from exact numbers and may have immaterial rounding differences.

*($ in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Percentage of Revenue 2025 | 2024 | Increase (Decrease) 2025 vs 2024 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Service revenue | $223,477 | $212,017 | 94.7% | 95.3% | $11,460 | 5.4% |
| Product sales | 12,548 | 10,409 | 5.3% | 4.7% | 2,139 | 20.5% |
| **Total revenue** | 236,025 | 222,426 | 100.0% | 100.0% | 13,599 | 6.1% |
| Cost of service revenue, excluding depreciation and amortization | 4,629 | 4,641 | 2.0% | 2.1% | (12) | (0.3)% |
| Cost of product sales | 8,946 | 7,848 | 3.8% | 3.5% | 1,098 | 14.0% |
| Operating expenses | 81,317 | 74,903 | 34.5% | 33.7% | 6,414 | 8.6% |
| Selling, general and administrative expenses | 48,466 | 46,343 | 20.5% | 20.8% | 2,123 | 4.6% |
| Depreciation, amortization and (gain) loss on disposal of assets, net | 29,473 | 27,522 | 12.4% | 12.4% | 1,951 | 7.1% |
| Total costs and expenses | 172,831 | 161,257 | 73.2% | 72.5% | 11,574 | 7.2% |
| **Income from operations** | 63,194 | 61,169 | 26.8% | 27.5% | 2,025 | 3.3% |
| Interest expense, net | 16,572 | 18,845 | 7.0% | 8.5% | (2,273) | (12.1)% |
| Gain on interest rate swap | — | (23) | — | (0.0)% | 23 | (100.0)% |
| Loss on extinguishment of debt | 23 | — | 0.0% | — | 23 | n/a |
| Other income, net | (6,003) | (5,245) | (2.5)% | (2.4)% | (758) | 14.5% |
| Total other expenses | 10,592 | 13,577 | 4.5% | 6.1% | (2,985) | (22.0)% |
| Income before income taxes | 52,602 | 47,592 | 22.3% | 21.4% | 5,010 | 10.5% |
| Income tax provision | 14,027 | 13,369 | 6.0% | 6.0% | 658 | 4.9% |
| **Net income** | $38,575 | $34,223 | 16.3% | 15.4% | $4,352 | 12.7% |

*Service Revenue.* Service revenue increased by $11.5 million, or 5.4%, to $223.5 million for the three months ended June 30, 2025 from $212.0 million for the three months ended June 30, 2024, representing 94.7% and 95.3% of total revenue, respectively. The following table depicts service revenue by segment:

*($ in thousands)*

| Service revenue | Three Months Ended June 30, 2025 | 2024 | Percentage of Revenue 2025 | 2024 | Increase (Decrease) 2025 vs 2024 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $109,050 | $103,985 | 46.2% | 46.8% | $5,065 | 4.9% |
| Government Solutions | 97,971 | 91,469 | 41.5% | 41.1% | 6,502 | 7.1% |
| Parking Solutions | 16,456 | 16,563 | 7.0% | 7.4% | (107) | (0.6)% |
| Total service revenue | $223,477 | $212,017 | 94.7% | 95.3% | $11,460 | 5.4% |

Commercial Services service revenue increased by $5.1 million, or 4.9%, from $104.0 million for the three months ended June 30, 2024 to $109.1 million for the three months ended June 30, 2025. The increase was primarily due to increased product adoption and tolling activity compared to the prior year which contributed to a $2.7 million growth in RAC tolling revenue during the three months ended June 30, 2025, compared to the same period in 2024. In addition, we derived $2.2 million of increased revenue from our European operations, partially offset by lower revenue generated from our FMC customers due to customer churn and modest weakness attributable to macroeconomic factors compared to the same period in 2024.

Government Solutions service revenue increased by $6.5 million, or 7.1%, from $91.5 million for the three months ended June 30, 2024, to $98.0 million for the three months ended June 30, 2025. The increase was primarily driven by the expansion of bus lane and school bus stop arm enforcement programs contributing $4.6 million, with the remaining increase driven primarily by speed and red-light enforcement programs.

Parking Solutions service revenue decreased slightly to $16.5 million for the three months ended June 30, 2025, from $16.6 million for the three months ended June 30, 2024. The increased revenue from SaaS product offerings was offset by a decrease in subscription and professional services revenue related to parking management solutions.

*Product Sales.* Product sales were $12.5 million and $10.4 million for the three months ended June 30, 2025 and 2024, respectively. Product sales increased by $2.1 million, which was due to a $2.9 million increase in product sales to international customers in the Government Solutions segment which was partially offset by a decrease in product sales from the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.

*Cost of Service Revenue, Excluding Depreciation and Amortization.* Cost of service revenue, excluding depreciation and amortization remained flat at $4.6 million for both the three months ended June 30, 2025 and 2024.

*Cost of Product Sales.* Cost of product sales increased by $1.1 million from $7.8 million in the three months ended June 30, 2024 to $8.9 million in the three months ended June 30, 2025, which was in line with the increase in product sales discussed above.

*Operating Expenses.* Operating expenses increased by $6.4 million, or 8.6%, from $74.9 million for the three months ended June 30, 2024 to $81.3 million for the three months ended June 30, 2025. The increase in 2025 compared to the prior period was primarily in the Government Solutions business for approximately $6.3 million due to increases in subcontractor costs, wages and operational equipment, partially offset by a decrease in operating expenses in the Parking Solutions business. Operating expenses as a percentage of total revenue increased from 33.7% to 34.5% for the three months ended June 30, 2024 and 2025, respectively. The following table presents operating expenses by segment:

*($ in thousands)*

| Operating expenses | Three Months Ended June 30, 2025 | 2024 | Percentage of Revenue 2025 | 2024 | Increase (Decrease) 2025 vs 2024 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $23,501 | $23,189 | 10.0% | 10.4% | $312 | 1.3% |
| Government Solutions | 52,415 | 46,153 | 22.2% | 20.7% | 6,262 | 13.6% |
| Parking Solutions | 3,898 | 4,488 | 1.7% | 2.1% | (590) | (13.1)% |
| Operating expenses by segment | 79,814 | 73,830 | 33.9% | 33.2% | 5,984 | 8.1% |
| Other expenses | 1,503 | 1,073 | 0.6% | 0.5% | 430 | 40.1% |
| Total operating expenses | $81,317 | $74,903 | 34.5% | 33.7% | $6,414 | 8.6% |

29

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses increased to $48.5 million for the three months ended June 30, 2025 compared to $46.3 million for the same period in 2024. This is primarily due to a $2.0 million increase in professional services and $1.7 million increase in credit loss expense, partially offset by a decrease in restructuring expenses compared to the same period in the prior year. Selling, general and administrative expenses as a percentage of total revenue decreased from 20.8% to 20.5% for the three months ended June 30, 2024 and 2025, respectively. The following table presents selling, general and administrative expenses by segment:

*($ in thousands)*

| Selling, general and administrative expenses | Three Months Ended June 30, 2025 | 2024 | Percentage of Revenue 2025 | 2024 | Increase (Decrease) 2025 vs 2024 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $18,823 | $15,757 | 8.0% | 7.1% | $3,066 | 19.5% |
| Government Solutions | 17,660 | 16,743 | 7.5% | 7.5% | 917 | 5.5% |
| Parking Solutions | 6,500 | 6,644 | 2.7% | 3.0% | (144) | (2.2)% |
| Selling, general and administrative expenses by segment | 42,983 | 39,144 | 18.2% | 17.6% | 3,839 | 9.8% |
| Other expenses | 5,483 | 7,199 | 2.3% | 3.2% | (1,716) | (23.8)% |
| Total selling, general and administrative expenses | $48,466 | $46,343 | 20.5% | 20.8% | $2,123 | 4.6% |

*Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net.* Depreciation, amortization and (gain) loss on disposal of assets, net, increased by $2.0 million to $29.5 million for the three months ended June 30, 2025 from $27.5 million for the same period in 2024. This was primarily due to an increase in depreciation expense for the Commercial Services and Government Solutions businesses in the 2025 period.

*Interest Expense, Net.* Interest expense, net decreased by approximately $2.2 million from $18.8 million for the three months ended June 30, 2024 to $16.6 million for the same period in 2025. This was primarily attributable to voluntary principal prepayments made during 2024 and 2025 reducing the balance of the 2021 Term Loan (as defined below) and a 50 basis-point reduction in the interest rate from refinancing our debt in October 2024 coupled with decreasing SOFR rates. See “*Liquidity and Capital Resources”* below.

*Gain on Interest Rate Swap.* We recorded a gain of less than $(0.1) million during the three months ended June 30, 2024, of which $0.2 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $(0.3) million related to the monthly cash proceeds on the interest rate swap. We exercised our option to cancel the interest rate swap agreement effective the end of the third quarter of 2024.

*Loss on Extinguishment of Debt*. We recorded less than $0.1 million of loss on extinguishment of debt during the three months ended June 30, 2025 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayment on the 2021 Term Loan.

*Other Income, Net.* Other income, net was $6.0 million for the three months ended June 30, 2025 compared to $5.2 million for the three months ended June 30, 2024. The increase was primarily from non-operating income from foreign currency transactions mainly in the Commercial Services business.

*Income Tax Provision.* Income tax provision was $14.0 million representing an effective tax rate of 26.7% for the three months ended June 30, 2025 compared to a tax provision of $13.4 million, with an effective tax rate of 28.1% for the same period in 2024.

*Net Income.* We had net income of $38.6 million for the three months ended June 30, 2025, as compared to a net income of $34.2 million for the three months ended June 30, 2024. The $4.4 million increase in net income was primarily due to the decrease in interest expense and the other statement of operations activity discussed above.

### Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The following table sets forth our statements of operations data and expresses each item as a percentage of total revenue for the periods presented as well as the changes between periods. The tables and information provided in this section were derived from exact numbers and may have immaterial rounding differences.

*($ in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | Percentage of Revenue 2025 | 2024 | Increase (Decrease) 2025 vs 2024 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Service revenue | $435,379 | $414,738 | 94.8% | 96.0% | $20,641 | 5.0% |
| Product sales | 23,900 | 17,418 | 5.2% | 4.0% | 6,482 | 37.2% |
| **Total revenue** | 459,279 | 432,156 | 100.0% | 100.0% | 27,123 | 6.3% |
| Cost of service revenue, excluding depreciation and amortization | 9,412 | 8,946 | 2.0% | 2.1% | 466 | 5.2% |
| Cost of product sales | 16,978 | 13,134 | 3.7% | 3.0% | 3,844 | 29.3% |
| Operating expenses | 155,056 | 145,543 | 33.8% | 33.7% | 9,513 | 6.5% |
| Selling, general and administrative expenses | 99,967 | 94,514 | 21.8% | 21.9% | 5,453 | 5.8% |
| Depreciation, amortization and (gain) loss on disposal of assets, net | 57,287 | 54,497 | 12.5% | 12.6% | 2,790 | 5.1% |
| Total costs and expenses | 338,700 | 316,634 | 73.8% | 73.3% | 22,066 | 7.0% |
| **Income from operations** | 120,579 | 115,522 | 26.2% | 26.7% | 5,057 | 4.4% |
| Interest expense, net | 33,208 | 38,480 | 7.2% | 8.9% | (5,272) | (13.7)% |
| Gain on interest rate swap | — | (419) | — | (0.1)% | 419 | (100.0)% |
| Loss on extinguishment of debt | 48 | 595 | 0.0% | 0.1% | (547) | (91.9)% |
| Other income, net | (10,112) | (9,698) | (2.2)% | (2.2)% | (414) | 4.3% |
| Total other expenses | 23,144 | 28,958 | 5.0% | 6.7% | (5,814) | (20.1)% |
| Income before income taxes | 97,435 | 86,564 | 21.2% | 20.0% | 10,871 | 12.6% |
| Income tax provision | 26,521 | 23,192 | 5.8% | 5.3% | 3,329 | 14.4% |
| **Net income** | $70,914 | $63,372 | 15.4% | 14.7% | $7,542 | 11.9% |

*Service Revenue.* Service revenue increased by $20.6 million, or 5.0%, to $435.4 million for the six months ended June 30, 2025 from $414.7 million for the six months ended June 30, 2024, representing 94.8% and 96.0% of total revenue, respectively. The following table depicts service revenue by segment:

*($ in thousands)*

| Service revenue | Six Months Ended June 30, 2025 | 2024 | Percentage of Revenue 2025 | 2024 | Increase (Decrease) 2025 vs 2024 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $210,439 | $199,874 | 45.8% | 46.3% | $10,565 | 5.3% |
| Government Solutions | 191,953 | 181,744 | 41.8% | 42.1% | 10,209 | 5.6% |
| Parking Solutions | 32,987 | 33,120 | 7.2% | 7.6% | (133) | (0.4)% |
| Total service revenue | $435,379 | $414,738 | 94.8% | 96.0% | $20,641 | 5.0% |

31

Commercial Services service revenue increased by $10.6 million, or 5.3%, from $199.9 million for the six months ended June 30, 2024 to $210.4 million for the six months ended June 30, 2025. The increase was primarily due to increased product adoption and tolling activity compared to the prior year. These factors contributed to a $6.9 million growth in RAC tolling revenue and the remaining increase was driven mainly by an increase of $2.0 million from European operations during the six months ended June 30, 2025, compared to the same period in 2024.

Government Solutions service revenue increased by $10.2 million, or 5.6%, from $181.7 million for the six months ended June 30, 2024, to $192.0 million for the six months ended June 30, 2025. The increase was primarily driven by $8.4 million from the expansion of bus lane and school bus stop arm enforcement programs and the remaining increase is mainly from speed and red-light enforcement programs.

Parking Solutions service revenue decreased slightly to $33.0 million for the six months ended June 30, 2025, from $33.1 million for the six months ended June 30, 2024. The increased revenue from SaaS product offerings was offset by a decrease in subscription and professional services related to parking management solutions.

*Product Sales.* Product sales were $23.9 million and $17.4 million for the six months ended June 30, 2025 and 2024, respectively. Product sales increased by $6.5 million due to a $6.8 million increase in product sales to international customers in the Government Solutions segment which was partially offset by a decrease in product sales from the Parking Solutions segment. Customer buying patterns vary greatly from period to period related to product sales.

*Cost of Service Revenue, Excluding Depreciation and Amortization.* Cost of service revenue, excluding depreciation and amortization increased from $8.9 million for the six months ended June 30, 2024 to $9.4 million for the six months ended June 30, 2025, mainly due to increased recurring service and third-party costs for our segments.

*Cost of Product Sales.* Cost of product sales increased by approximately $3.9 million from $13.1 million in the six months ended June 30, 2024 to $17.0 million in the six months ended June 30, 2025, which was in line with the increase in product sales discussed above.

*Operating Expenses.* Operating expenses increased by $9.5 million, or 6.5%, from $145.5 million for the six months ended June 30, 2024 to approximately $155.1 million for the six months ended June 30, 2025. The increase in 2025 compared to the prior year was primarily in the Government Solutions business for approximately $9.6 million due to increases in subcontractor and operational equipment costs, partially offset by a decrease in operating expenses in the Parking Solutions business. Operating expenses as a percentage of total revenue increased slightly from 33.7% to 33.8% for the six months ended June 30, 2024 and 2025, respectively. The following table presents operating expenses by segment:

*($ in thousands)*

| Operating expenses | Six Months Ended June 30, 2025 | 2024 | Percentage of Revenue 2025 | 2024 | Increase (Decrease) 2025 vs 2024 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $45,579 | $44,668 | 9.9% | 10.3% | $911 | 2.0% |
| Government Solutions | 99,376 | 89,755 | 21.6% | 20.8% | 9,621 | 10.7% |
| Parking Solutions | 7,500 | 8,981 | 1.7% | 2.1% | (1,481) | (16.5)% |
| Operating expenses by segment | 152,455 | 143,404 | 33.2% | 33.2% | 9,051 | 6.3% |
| Other expenses | 2,601 | 2,139 | 0.6% | 0.5% | 462 | 21.6% |
| Total operating expenses | $155,056 | $145,543 | 33.8% | 33.7% | $9,513 | 6.5% |

32

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses increased to $100.0 million for the six months ended June 30, 2025 compared to $94.5 million for the same period in 2024. This is primarily due to a $4.6 million increase in credit loss expense and $3.6 million in increased professional services fees, partially offset by a decrease in restructuring expenses compared to the same period in 2024. Selling, general and administrative expenses as a percentage of total revenue decreased slightly from 21.9% to 21.8% for the six months ended June 30, 2024 and 2025, respectively. The following table presents selling, general and administrative expenses by segment:

*($ in thousands)*

| Selling, general and administrative expenses | Six Months Ended June 30, 2025 | 2024 | Percentage of Revenue 2025 | 2024 | Increase (Decrease) 2025 vs 2024 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $38,405 | $33,254 | 8.4% | 7.7% | $5,151 | 15.5% |
| Government Solutions | 36,963 | 34,971 | 8.0% | 8.1% | 1,992 | 5.7% |
| Parking Solutions | 13,758 | 13,070 | 3.0% | 3.0% | 688 | 5.3% |
| Selling, general and administrative expenses by segment | 89,126 | 81,295 | 19.4% | 18.8% | 7,831 | 9.6% |
| Other expenses | 10,841 | 13,219 | 2.4% | 3.1% | (2,378) | (18.0)% |
| Total selling, general and administrative expenses | $99,967 | $94,514 | 21.8% | 21.9% | $5,453 | 5.8% |

*Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net.* Depreciation, amortization and (gain) loss on disposal of assets, net, increased by $2.8 million to $57.3 million for the six months ended June 30, 2025 from $54.5 million for the same period in 2024. This was primarily due to an increase in depreciation expense related to equipment and software in the 2025 period compared to the 2024 period.

*Interest Expense, Net.* Interest expense, net decreased by $5.3 million from $38.5 million for the six months ended June 30, 2024 to $33.2 million for the same period in 2025. This was primarily attributable to voluntary principal prepayments made during 2024 and 2025 reducing the balance of the 2021 Term Loan and a 50 basis-point reduction in the interest rate from refinancing our debt in October 2024 coupled with decreasing SOFR rates. See “*Liquidity and Capital Resources”* below.

*Gain on Interest Rate Swap.* We recorded a $(0.4) million gain during the six months ended June 30, 2024, of which $0.2 million is associated with the derivative instrument re-measured to fair value at the end of the reporting period offset by $(0.6) million related to the monthly cash proceeds on the interest rate swap. We exercised our option to cancel the interest rate swap agreement effective the end of the third quarter of 2024.

*Loss on Extinguishment of Debt*. We recorded less than $0.1 million of loss on extinguishment of debt during the six months ended June 30, 2025 related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments on the 2021 Term Loan. We recorded a $0.6 million loss on extinguishment of debt during the six months ended June 30, 2024 related to the write-off of pre-existing deferred financing costs and discounts in connection with the refinancing of the 2021 Term Loan in February 2024.

*Other Income, Net.* Other income, net was $10.1 million for the six months ended June 30, 2025 compared to approximately $9.7 million for the six months ended June 30, 2024. The increase was mainly from non-operating income from foreign currency transactions in the 2025 period.

*Income Tax Provision.* Income tax provision was $26.5 million representing an effective tax rate of 27.2% for the six months ended June 30, 2025 compared to a tax provision of $23.2 million, with an effective tax rate of 26.8% for the same period in 2024.

*Net Income.* We had net income of $70.9 million for the six months ended June 30, 2025, as compared to a net income of $63.4 million for the six months ended June 30, 2024. The $7.5 million increase in net income was primarily due to the increase in service revenue and product sales, a decrease in interest expense and the other statement of operations activity discussed above.

### Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations and the available borrowing under our Revolver.

We believe that our existing cash and cash equivalents, cash flows provided by operating activities and our ability to borrow under our Revolver will be sufficient to meet operating cash requirements, service debt obligations and fund potential share repurchases for at least the next 12 months and thereafter for the foreseeable future. Our ability to generate sufficient cash from our operating activities depends on our future performance, which is subject to general economic, political, financial, competitive and other factors beyond our control. In addition, our future capital expenditures and other cash requirements could be higher than currently expected due to various factors, including any expansion of our business or strategic acquisitions.

We have incurred significant long-term debt as a result of acquisitions completed in prior years. Should we pursue strategic acquisitions, we may need to raise additional capital, which may be in the form of additional long-term debt, borrowings on our Revolver, or equity financings, all of which may not be available to us on favorable terms or at all.

We have the ability to borrow under our Revolver to meet obligations as they come due. On May 15, 2025, we exercised our option to increase the commitments under the terms of the Revolver and entered into a fourth amendment to the Revolver which increased the existing commitment from $75.0 million to $125.0 million available for loans and letters of credit. As of June 30, 2025, we had no outstanding borrowings and $123.9 million available for borrowing, net of letters of credit, under our Revolver. Our cash on hand was $147.7 million as of June 30, 2025.

In fiscal year 2024, we refinanced the 2021 Term Loan which reduced the interest rate by an aggregate 1.00% and eliminated the applicable credit spread adjustment. We made early repayments of approximately $2.3 million and $4.5 million on our 2021 Term Loan during the three and six months ended June 30, 2025, and as a result, the total principal outstanding on the 2021 Term Loan was $691.1 million as of June 30, 2025.

At June 30, 2025, the Tax Receivable Agreement liability was approximately $43.2 million. During the second quarter of 2025, we made an estimated payment of $5.0 million related to the 2024 tax year. We expect to make payments of approximately $5.2 million per year for the next eight years and approximately $1.1 million in the final year.

#### Share Repurchases and Retirement

In October 2023, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period. After we repurchased an aggregate 3.5 million shares for approximately $87.3 million in fiscal year 2024, in December 2024, our Board of Directors authorized the repurchase of up to an additional $100.0 million of our outstanding shares under the then-existing program, providing us with approximately $112.7 million available for repurchases. On December 11, 2024, we entered into an ASR agreement with a third-party financial institution and paid $112.7 million to receive an initial delivery of 3,821,958 shares of our Class A Common Stock. The final settlement occurred on March 3, 2025, at which time, we received an additional 685,934 shares calculated using a volume-weighted average price over the term of the ASR agreement. All repurchased shares were subsequently retired. The authorization under this repurchase program ended on April 30, 2025.

During the second quarter of 2025, we paid approximately $1.7 million for excise taxes related to 2024 net share repurchases.

On May 17, 2025, our Board of Directors authorized a new share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock. Under the repurchase program, we may purchase shares of Class A Common Stock until November 2026 through open market purchases, in privately negotiated transactions or by other means, including trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, and ASR agreements, each as permitted under applicable rules and regulations. The amount and timing of repurchases will be determined at our discretion and will depend on a variety of factors, including price, general business and market conditions, applicable legal requirements, and alternative investment opportunities. The repurchase program does not obligate us to acquire any particular amount of Class A Common Stock or at any specific time intervals and may be modified, suspended or terminated at any time at our discretion. We have not yet repurchased shares of Class A Common Stock under this program.

The following table sets forth certain captions indicated on our statements of cash flows for the respective periods:

*($ in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $138,113 | $74,368 |
| Net cash used in investing activities | (56,019) | (27,677) |
| Net cash used in financing activities | (10,920) | (60,917) |

### Cash Flows from Operating Activities

Cash provided by operating activities increased by $63.7 million from $74.4 million for the six months ended June 30, 2024 to $138.1 million for the six months ended June 30, 2025. Net income year-over-year increased by $7.5 million, from $63.4 million in 2024 to $70.9 million in 2025. The aggregate adjustments to reconcile net income to net cash provided by operating activities increased $2.6 million mainly due to increased credit loss expense, depreciation expense and stock-based compensation, which were partially offset by a change in deferred income taxes. The aggregate changes in operating assets and liabilities increased by $53.6 million in 2025 compared to the prior year primarily due to a reduction in the net use of working capital, of which, the majority is attributable to a large payment that reduced accounts payable and other current liabilities in the first half of 2024. In addition, changes in prepaid and other current assets also contributed to the increase in 2025 compared to the prior year.

### Cash Flows from Investing Activities

Cash used in investing activities was $56.0 million and $27.7 million for the six months ended June 30, 2025 and 2024, respectively. The increase in cash used was primarily driven by a $27.8 million increase for purchases of installation and service parts and property and equipment mainly for the Government Solutions business compared to the same period in the prior year.

### Cash Flows from Financing Activities

Cash used in financing activities was $10.9 million and $60.9 million for the six months ended June 30, 2025 and 2024, respectively. The decreased use in cash from financing activities was mainly due to $51.5 million of share repurchases in 2024 and no comparable repurchases in the current year.

### Long-term Debt, Net

#### 2021 Term Loan

In March 2021, VM Consolidated, Inc. (“***VM Consolidated”***), our wholly owned subsidiary, entered into an Amendment and Restatement Agreement No.1 to the First Lien Term Loan Credit Agreement (the “***2021 Term Loan”***) with a syndicate of lenders. The 2021 Term Loan has an aggregate borrowing of $900.0 million, maturing on March 24, 2028. In connection with the 2021 Term Loan borrowings, we had $4.6 million of offering discount costs and $4.5 million in deferred financing costs, both of which were capitalized and are being amortized over the remaining life of the 2021 Term Loan.

In February 2024, VM Consolidated entered into a third amendment to the 2021 Term Loan (the “***Third Amendment”***) and in October 2024, a fourth amendment to the 2021 Term Loan (the “***Fourth Amendment”***) to refinance the 2021 Term Loan (the “***Refinancing Transactions”***). Pursuant to the Third Amendment and Fourth Amendment, the interest rate was reduced by an aggregate 1.00% to Term Secured Overnight Financing Rate (“***SOFR”***) plus 2.25% from SOFR plus 3.25% with the SOFR floor unchanged at 0.00%. The credit spread adjustment, ranging from 0.11448% to 0.71513%, was eliminated. In addition, the 2021 Term Loan was amended to remove a provision for principal repayments which were previously required to be paid in quarterly installments.

During each of the six months ended June 30, 2025 and 2024, we made early repayments of $4.5 million on the 2021 Term Loan, and as a result the total principal outstanding was $691.1 million as of June 30, 2025.

We recorded less than $0.1 million of loss on extinguishment of debt during both the three and six months ended June 30, 2025, related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments. We recognized a $0.6 million loss on extinguishment of debt for the six months ended June 30, 2024, related to the write-off of pre-existing deferred financing costs and discounts in connection with the refinancing of the 2021 Term Loan in February 2024.

The 2021 Term Loan bears interest based at our option, on either (i) SOFR plus an applicable margin of 2.25% per annum, or (ii) an alternate base rate plus an applicable margin of 1.25% per annum. As of June 30, 2025, the interest rate on the 2021 Term Loan was 6.6%.

In addition, the 2021 Term Loan requires mandatory prepayments equal to the product of the excess cash flows of the Company (as defined in the 2021 Term Loan agreement) and the applicable prepayment percentages (calculated as of the last day of the fiscal year), as set forth in the following table:

| Consolidated First Lien Net Leverage Ratio (As Defined by the 2021 Term Loan Agreement) | Applicable Prepayment Percentage |
| --- | ---: |
| \> 3.70:1.00 | 50% |
| \< 3.70:1.00 and \> 3.20:1.00 | 25% |
| \< 3.20:1.00 | 0% |

#### Senior Notes

In March 2021, VM Consolidated issued an aggregate principal amount of $350.0 million in Senior Unsecured Notes (the “***Senior Notes”***), due on April 15, 2029. In connection with the issuance of the Senior Notes, we incurred $5.7 million in lender and third-party costs, which were capitalized as deferred financing costs and are being amortized over the remaining life of the Senior Notes.

Interest on the Senior Notes is fixed at 5.50% per annum and is payable on April 15 and October 15 of each year. We may redeem all or a portion of the Senior Notes at the redemption prices set forth below in percentages by year, plus accrued and unpaid interest:

| Year | Percentage |
| --- | ---: |
| 2025 | 101.375% |
| 2026 and thereafter | 100.000% |

#### The Revolver

On May 15, 2025, we exercised our option to increase the commitments under the terms of the Revolver and entered into a fourth amendment to the Revolver which increased the existing commitment from $75.0 million to $125.0 million available for loans and letters of credit. The Revolver matures on December 18, 2026. Borrowing eligibility under the Revolver is subject to a monthly borrowing base calculation based on (i) certain percentages of eligible accounts receivable and inventory, less (ii) certain reserve items, including outstanding letters of credit and other reserves. The Revolver bears interest on either (1) SOFR plus an applicable margin, or (2) an alternate base rate, plus an applicable margin. The margin percentage applied to (1) SOFR is either 1.25%, 1.50%, or 1.75%, or (2) the base rate is either 0.25%, 0.50%, or 0.75%, depending on our average availability to borrow under the commitment. There is a credit spread adjustment of 0.10% for a one-month duration, 0.15% for a three-month duration, and 0.25% for a six-month duration, in addition to SOFR and the applicable margin percentages. There were no outstanding borrowings on the Revolver as of June 30, 2025 or December 31, 2024. The availability to borrow was $123.9 million, net of $1.1 million of outstanding letters of credit at June 30, 2025.

Interest on the unused portion of the Revolver is payable quarterly at 0.375% and we are also required to pay participation and fronting fees at 1.38% on $1.1 million of outstanding letters of credit as of June 30, 2025.

All borrowings and other extensions of credits under the 2021 Term Loan, Senior Notes and the Revolver are subject to the satisfaction of customary conditions and restrictive covenants including absence of defaults and accuracy in material respects of representations and warranties. Substantially all of our assets are pledged as collateral to secure our indebtedness under the 2021 Term Loan. At June 30, 2025, we were compliant with all debt covenants in our debt agreements.

#### Interest Expense, Net

We recorded interest expense, including amortization of deferred financing costs and discounts, of $16.6 million and $18.8 million for the three months ended June 30, 2025 and 2024, respectively, and $33.2 million and $38.5 million for the six months ended June 30, 2025 and 2024, respectively.

### Off-Balance Sheet Arrangements

We do not have any material off-balance sheet financing arrangements as of June 30, 2025.

### Critical Accounting Policies, Estimates and Judgments

The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Please refer to our Annual Report for our critical accounting policies, estimates and judgments. We believe that our estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.

### Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, refer to Note 2, *Significant Accounting Policies*, in Part I, Item 1, Financial Statements.

## Market risk

As filed, 1,245 characters.

We are exposed to interest rate risk due to the variable interest rate on the 2021 Term Loan described in Part I, Item 2, *Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.*

Interest rate risk represents our exposure to fluctuations in interest rates associated with the variable rate debt represented by the 2021 Term Loan, which has an outstanding balance of $691.1 million at June 30, 2025. The 2021 Term Loan bears interest based, at our option, on either (i) SOFR plus an applicable margin of 2.25% per annum, or (ii) an alternate base rate plus an applicable margin of 1.25% per annum. As of June 30, 2025, the interest rate on the 2021 Term Loan was 6.6%.

Based on the June 30, 2025 balance outstanding, each 1% movement in interest rates will result in an approximately $6.9 million change in annual interest expense.

In December 2022, we entered into a cancellable interest rate swap agreement to hedge our exposure to interest rate fluctuations associated with the LIBOR (now transitioned to SOFR) portion of the variable interest rate on our 2021 Term Loan. We exercised our option to cancel the interest rate swap effective the end of the third quarter of 2024.

## Controls and procedures

As filed, 2,455 characters.

#### Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. Our Chief Executive Officer and Chief Financial Officer, with assistance from other members of management, have evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based upon such evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of such date.

#### Changes in Internal Control Over Financial Reporting

During the quarter ended June 30, 2025, we completed the first phase of a multi-phase implementation of a new global enterprise resource planning (“***ERP”***) system that will replace components of our existing operating and financial systems. The implementation of the new ERP system is expected to be completed in fiscal year 2026. The implementation that has been completed to date has resulted in changes to certain of our processes and internal controls, including the implementation of new applications, interfaces and reports which support our financial reporting. The new ERP system is designed to accurately maintain the flow of financial information, enhance operational functionality and accelerate information reporting to our management. The implemented portion of the new ERP system was used during the quarter ended June 30, 2025, and the new and modified processes and controls implemented were used to prepare our consolidated financial statements for the three and six months ended June 30, 2025 included in this Report.

Except as described above, there have been no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 4,199 characters.

### Risks Factors

Part I, Item 1A. “Risk Factors” in our Annual Report includes a discussion of our risk factors. Other than the risk factor below and the risk factor included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, there have been no material changes from the risk factors described in our Annual Report. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future SEC filings.

***We cannot guarantee that our share repurchase programs will enhance long-term shareholder value. Share repurchases could also increase the volatility of the trading price of our stock and could diminish our cash reserves. In addition, Congress enacted the Inflation Reduction Act in 2022, which (among other provisions) provided for a 1% excise tax on net share repurchases. This provision applies to share repurchases initiated after January 1, 2023.***

In October 2023, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market, accelerated share repurchase (“***ASR”***) or privately negotiated transactions. In June 2024, we entered into a share repurchase agreement with a stockholder, pursuant to which we repurchased, directly from the stockholder, 2.0 million shares of our Class A Common Stock for an aggregate purchase price of $51.5 million. During the fourth quarter of 2024, we repurchased approximately 1.5 million shares of our Class A Common Stock through open market transactions and paid $35.8 million.

In December 2024, our Board of Directors authorized the repurchase of up to an additional $100.0 million of our outstanding shares of Class A Common Stock under the October 2023 program, providing the Company with approximately $112.7 million available for repurchases. On December 11, 2024, we entered into an ASR agreement with a third-party financial institution to purchase $112.7 million of our Class A Common Stock. Pursuant to the terms of the ASR agreement, we received and retired 3,821,958 shares of our Class A Common Stock and paid $112.7 million. The final settlement occurred on March 3, 2025, at which time we received an additional 685,934 shares of our Class A Common Stock using a volume-weighted average price over the term of the ASR agreement. All repurchased shares were subsequently retired.

We paid a total of $200.0 million for share repurchases during the year ended December 31, 2024. In addition, we recorded approximately $1.7 million within accrued liabilities related to the excise taxes payable on net share repurchases on the consolidated balance sheets as of December 31, 2024, which has been paid as of June 30, 2025. The prior repurchase authorization expired on April 30, 2025.

On May 17, 2025, our Board of Directors authorized a new share repurchase program to repurchase up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market, ASR or privately negotiated transactions. We did not make any share repurchases under this program during the second quarter of 2025.

The timing, price, and quantity of purchases under the repurchase programs have been, and will continue to be, made at the discretion of our management based upon a variety of factors including share price, general and business market conditions, compliance with applicable laws and regulations, corporate and regulatory requirements, and alternative uses of capital. There is no guarantee as to the exact number of shares that we will repurchase and we cannot guarantee that share repurchase programs will enhance long-term stockholder value. Additionally, the Inflation Reduction Act of 2022 introduced a 1% excise tax on share repurchases, which has increased the costs associated with repurchasing shares of our Class A Common Stock. Our share repurchase programs could affect the trading price of our Class A Common Stock and increase volatility. In addition, our repurchases under our share repurchase programs have diminished, and could continue to diminish, our cash reserves.

Filed Aug 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-104192. Last ingested by Listed: Oct 31, 2026, 03:18 ET. No prices; not investment advice.