# VERRA MOBILITY Corp: Form 10-Q for the period ended Sep 30, 2026

- Company: [VERRA MOBILITY Corp](/companies/vrrm.md) (CIK 1682745)
- Form: 10-Q
- Filed: 2026-10-30
- Accepted by EDGAR: Oct 30, 2026, 08:40 ET
- Period: 2026-09-30
- Accession: 0001628280-26-068455
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1682745/000162828026068455/vrrm-20260930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1682745/000162828026068455/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-07-01 to 2026-09-30 | $258.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2026-01-01 to 2026-09-30 | $746.0m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Selling, general and administrative | 3 months, 2026-07-01 to 2026-09-30 | $43.4m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2026-01-01 to 2026-09-30 | $128.3m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2026-07-01 to 2026-09-30 | $65.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2026-01-01 to 2026-09-30 | $84.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2026-07-01 to 2026-09-30 | $15.0m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months, 2026-01-01 to 2026-09-30 | $45.9m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2026-07-01 to 2026-09-30 | $14.9m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2026-01-01 to 2026-09-30 | $34.6m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-07-01 to 2026-09-30 | $40.4m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2026-01-01 to 2026-09-30 | $19.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-07-01 to 2026-09-30 | $0.27 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2026-01-01 to 2026-09-30 | $0.12 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-07-01 to 2026-09-30 | $0.27 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2026-01-01 to 2026-09-30 | $0.12 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-07-01 to 2026-09-30 | 152,120,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2026-01-01 to 2026-09-30 | 152,988,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2026-01-01 to 2026-09-30 | $211.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2026-01-01 to 2026-09-30 | $80.2m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 9 months, 2026-01-01 to 2026-09-30 | $51.6m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2026-09-30 | $137.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-09-30 | $527.7m | us-gaap:AssetsCurrent |
| Total assets | at 2026-09-30 | $1.67bn | us-gaap:Assets |
| Current liabilities | at 2026-09-30 | $257.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-09-30 | $1.41bn | us-gaap:Liabilities |
| Long-term debt | at 2026-09-30 | $1.02bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2026-09-30 | $9.5m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2026-09-30 | $264.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 56,041 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 RACs, Direct Fleets, and 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 automated safety solutions and services to states, municipalities, counties, school districts, and law enforcement agencies of all sizes, primarily in the United States, Canada, and Australia. We provide complete, end-to-end speed, red-light, school bus stop arm, and city 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.

In connection with the executive leadership and organizational realignment described under “Recent Events”, we are evaluating the effect of changes to our organizational structure and internal management reporting on the identification of our operating and reportable segments. We continue to report three operating and reportable segments for the periods presented. Depending on how the organizational and internal management reporting changes affect the financial information regularly reviewed by our chief operating decision maker in assessing performance and allocating resources, the evaluation could result in a change to our segment reporting in a future period, including reporting as a single operating and reportable segment. Any such change would be reflected beginning in the period in which the change becomes effective, with prior-period segment information recast as required.

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 $24.8 million, or 3.4%, from $721.2 million in the nine months ended September 30, 2025 to $746.0 million in the same period in 2026. The increase was mainly due to expansion in speed, bus

lane, red light, school bus and other services and installation revenue from the NYCDOT program in the Government Solutions segment.

- Generated cash flows from operating activities of $211.8 million and $215.8 million for the nine months ended September 30, 2026 and 2025, respectively. Our cash on hand was $137.0 million as of September 30, 2026.

### Recent Events

#### Change in Executive Leadership and Organizational Realignment

On June 1, 2026, we announced that David Roberts had departed as our President and Chief Executive Officer and as a member of the Board. The Board appointed Jon Keyser, previously our Chief Transformation Officer and Executive Vice President and Chief Legal Officer, as Interim President and Chief Executive Officer. On September 30, 2026, we announced that Jon Newhard was appointed by the Board as President and Chief Executive Officer effective November 1, 2026. On October 2, 2026, we entered into a Separation, Transition and Release Agreement (the "Separation Agreement") with Mr. Keyser. Under the Separation Agreement, Mr. Keyser’s last day of work as our Interim President and Chief Executive Officer will be October 31, 2026, he will resign from all officer and director positions with us and our subsidiaries and affiliates effective November 1, 2026, and he will continue as a full-time employee in the role of Special Advisor through December 31, 2026 to support the Company and the Chief Executive Officer leadership transition.

On October 15, 2026, we announced that Craig Conti will resign as our Executive Vice President and Chief Financial Officer, effective November 4, 2026, to pursue another opportunity in a different industry. Mr. Conti’s decision was not related to our financial or operating results or to any disagreement with us regarding our financial, operational, accounting or reporting policies or practices. The Board has retained an executive search firm to conduct a comprehensive search for a permanent Chief Financial Officer. On October 29, 2026, the Board appointed Matthew Kvarda, a Managing Director with Alvarez & Marsal North America, LLC (“***A&M”***), as Interim Chief Financial Officer and principal financial officer, effective November 5, 2026, to serve in such role until a permanent Chief Financial Officer is appointed. Mr. Kvarda’s services will be provided pursuant to an engagement letter between the Company and A&M.

On June 17, 2026, we announced organizational changes intended to accelerate our transformation initiatives, strengthen customer focus and create a more agile and efficient operating model. These changes build upon a hybrid operating model that centralizes key functions, including Human Resources, Finance, Legal, Government Relations, Engineering and Product Management. Stacey Moser was appointed Chief Customer Officer with responsibility for sales, account management and marketing across our Commercial Services and Government Solutions businesses. We are evaluating the effect of these organizational and internal management reporting changes on our operating and reportable segments. See “Our Segments” above for additional information.

#### Commercial Services Customer Contracts

In May 2026, one of our three significant Commercial Services customers issued a termination notice with respect to its contract with us. The customer subsequently withdrew its termination notice in July 2026 and entered into a seven-year contract extension on terms that were materially less favorable to us as compared to the prior agreement, including an option for the customer to modulate its fleet volume. During the third quarter of 2026, the customer significantly reduced its fleet volume under the contract and on October 2, 2026, we exercised our option to terminate the contract, effective January 30, 2027. We may be unable to replace the revenue that was expected under this contract on a timely basis or at all. A second significant Commercial Services customer entered into a five-year contract extension, also on terms materially less favorable to us than those of the prior agreement and with fleet volume modulation rights that are subject to terms and conditions set forth in the agreement.

In addition, the contract with the third significant Commercial Services customer is approaching renewal, and we are following the customer's procurement process. We may not be successful in retaining the contract or may retain it only on terms less favorable to us than the current agreement. If we are not successful in retaining the third customer contract or if any renewal is on less favorable terms than the current agreement and/or if either of the remaining contracts is terminated, this would have a material adverse effect on our business, financial condition, and results of operations. See Part II, Item 1A, “Risk Factors” for additional information.

#### Goodwill and Intangible Impairment

We recorded a $64.0 million impairment to goodwill in our Parking Solutions segment during the nine months ended September 30, 2026, which is presented in a separate line item on the condensed consolidated statements of operations. This was in connection with our 2026 assessment of goodwill impairment where the Parking Solutions reporting unit's carrying value exceeded the estimated fair value. As part of this assessment, we determined that the carrying value of certain intangibles within the Parking Solutions segment were not recoverable and recorded a $40.4 million impairment to intangibles in our Parking Solutions segment during the nine months ended September 30, 2026, which is presented in a separate line item on the condensed consolidated statements of operations. Refer to Note 4, *Goodwill and Intangible Assets*, in Part I, Item 1, Financial Statements, for additional information.

### 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 Part I, Item 1A. “Risk Factors” of our Annual Report and in Part II, Item 1A. “Risk Factors” of this 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 or regulation regarding the adoption, expansion, or prohibition of Automatic License Plate Recognition, automated enforcement and traffic safety technology by local, state, or national governments, higher interest rates and the impact of government regulations and actions, including tariffs, trade protection measures, military conflicts or a government shutdown. 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, epidemic diseases, or a government shutdown.

We monitor the U.S. Transportation and Security Administration (the “***TSA”***) 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 third quarter of 2026 was approximately 3% less than TSA Passenger Volume for the same period in 2025.

#### 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 and certain distinct hardware installation and relocation activities. 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 and certain highly interdependent and interrelated installation services 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, certain distinct hardware installation and relocation costs, collection and other third-party costs in our segments.

*Cost of Product Sales.* Cost of product sales consists of the cost to acquire photo enforcement equipment purchased by Government Solutions customers, costs of certain highly interdependent and interrelated installation services, 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.

*Goodwill Impairment*. This relates to impairment loss recognized on goodwill from past acquisitions.

*Impairment of Intangible Assets.* This relates to impairment loss recognized on intangibles.

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

*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 September 30, 2026 Compared to Three Months Ended September 30, 2025

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 September 30, 2026 | 2025 | Percentage of Revenue 2026 | 2025 | Increase (Decrease) 2026 vs 2025 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Service revenue | $239,905 | $243,219 | 92.7% | 92.9% | $(3,314) | (1.4)% |
| Product sales | 18,970 | 18,719 | 7.3% | 7.1% | 251 | 1.3% |
| **Total revenue** | 258,875 | 261,938 | 100.0% | 100.0% | (3,063) | (1.2)% |
| Cost of service revenue, excluding depreciation and amortization | 14,888 | 9,246 | 5.8% | 3.5% | 5,642 | 61.0% |
| Cost of product sales | 17,638 | 12,826 | 6.8% | 4.9% | 4,812 | 37.5% |
| Operating expenses | 90,404 | 88,036 | 34.9% | 33.6% | 2,368 | 2.7% |
| Selling, general and administrative expenses | 43,438 | 47,757 | 16.8% | 18.2% | (4,319) | (9.0)% |
| Depreciation, amortization and (gain) loss on disposal of assets, net | 26,947 | 29,264 | 10.4% | 11.2% | (2,317) | (7.9)% |
| Total costs and expenses | 193,315 | 187,129 | 74.7% | 71.4% | 6,186 | 3.3% |
| **Income from operations** | 65,560 | 74,809 | 25.3% | 28.6% | (9,249) | (12.4)% |
| Interest expense, net | 15,027 | 16,421 | 5.8% | 6.3% | (1,394) | (8.5)% |
| Loss on extinguishment of debt | — | 21 | 0.0% | 0.0% | (21) | (100.0)% |
| Other income, net | (4,744) | (6,298) | (1.8)% | (2.4)% | 1,554 | (24.7)% |
| Total other expenses | 10,283 | 10,144 | 4.0% | 3.9% | 139 | 1.4% |
| Income before income taxes | 55,277 | 64,665 | 21.3% | 24.7% | (9,388) | (14.5)% |
| Income tax provision | 14,889 | 17,826 | 5.7% | 6.8% | (2,937) | (16.5)% |
| **Net income** | $40,388 | $46,839 | 15.6% | 17.9% | $(6,451) | (13.8)% |

*Service Revenue*. Service revenue decreased by $3.3 million, or 1.4%, to $239.9 million for the three months ended September 30, 2026 from $243.2 million for the three months ended September 30, 2025, representing 92.7% and 92.9% of total revenue, respectively. The following table depicts service revenue by segment:

*($ in thousands)*

| Service revenue | Three Months Ended September 30, 2026 | 2025 | Percentage of Revenue 2026 | 2025 | Increase (Decrease) 2026 vs 2025 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $100,333 | $117,296 | 38.8% | 44.8% | $(16,963) | (14.5)% |
| Government Solutions | 122,463 | 108,293 | 47.3% | 41.3% | 14,170 | 13.1% |
| Parking Solutions | 17,109 | 17,630 | 6.6% | 6.8% | (521) | (3.0)% |
| Total service revenue | $239,905 | $243,219 | 92.7% | 92.9% | $(3,314) | (1.4)% |

Commercial Services service revenue decreased by $17.0 million, or 14.5%, from $117.3 million for the three months ended September 30, 2025 to $100.3 million for the three months ended September 30, 2026. The decrease was primarily due to a $16.1 million reduction in RAC tolling revenue, due to the effect of contract extensions entered into with two of our significant customers on materially less favorable terms, fleet volume fluctuations with one significant customer, and reduced travel demand compared to the same period in 2025.

Government Solutions service revenue increased by $14.2 million, or 13.1%, from $108.3 million for the three months ended September 30, 2025, to $122.5 million for the three months ended September 30, 2026. The increase was primarily driven by an increase of $8.6 million attributable to expansion in speed, red light, bus lane, school bus and other services outside of NYCDOT. The remaining $5.6 million in growth is attributable to NYCDOT installation revenue on new camera installations, net of pricing changes under the new contract.

Parking Solutions service revenue decreased to $17.1 million for the three months ended September 30, 2026, from $17.6 million for the three months ended September 30, 2025. The decreased revenue was primarily driven by a reduction in professional services and subscription services related to parking management solutions, partially offset by increases in SaaS product offerings.

*Product Sales*. Product sales were $19.0 million and $18.7 million for the three months ended September 30, 2026 and 2025, respectively. The increase was due to a $0.2 million and $0.1 million increase in product sales in the Parking Solutions and Government Solutions segments, respectively. 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 $9.2 million for the three months ended September 30, 2025 to $14.9 million for the same period in 2026, mainly due to increased recurring service costs and NYCDOT installation service costs.

*Cost of Product Sales*. Cost of product sales increased by $4.8 million from $12.8 million in the three months ended September 30, 2025 to $17.6 million in the three months ended September 30, 2026, which was due to increased product sales primarily driven by the NYCDOT expansion.

*Operating Expenses*. Operating expenses increased by $2.4 million, or 2.7%, from $88.0 million for the three months ended September 30, 2025 to $90.4 million for the three months ended September 30, 2026. The increase in 2026 compared to the prior year period was primarily due to increases of $7.6 million in subcontractor, information technology, recurring services and rent costs, partially offset by $5.1 million in lower wage expense. Operating expenses as a percentage of total revenue increased from 33.6% to 34.9% for the three months ended September 30, 2025 and 2026, respectively. The following table presents operating expenses by segment:

*($ in thousands)*

| Operating expenses | Three Months Ended September 30, 2026 | 2025 | Percentage of Revenue 2026 | 2025 | Increase (Decrease) 2026 vs 2025 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $25,304 | $26,417 | 9.8% | 10.1% | $(1,113) | (4.2)% |
| Government Solutions | 58,847 | 55,968 | 22.7% | 21.4% | 2,879 | 5.1% |
| Parking Solutions | 4,731 | 4,199 | 1.8% | 1.6% | 532 | 12.7% |
| Operating expenses by segment | 88,882 | 86,584 | 34.3% | 33.1% | 2,298 | 2.7% |
| Other expenses | 1,522 | 1,452 | 0.6% | 0.5% | 70 | 4.8% |
| Total operating expenses | $90,404 | $88,036 | 34.9% | 33.6% | $2,368 | 2.7% |

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses decreased to $43.4 million for the three months ended September 30, 2026 compared to $47.8 million for the same period in 2025. This was primarily due to a $7.9 million decrease in wages and benefits expense and a $4.3 million decrease in stock-based compensation, partially offset by a $7.9 million increase in expenses related to organization restructuring and executive transition costs and a $2.1 million increase in credit loss expense compared to the same period in the prior year. Selling, general and administrative expenses as a percentage of total revenue decreased from 18.2% to 16.8% for the three months ended September 30, 2025 and 2026, respectively. The following table presents selling, general and administrative expenses by segment:

*($ in thousands)*

| Selling, general and administrative expenses | Three Months Ended September 30, 2026 | 2025 | Percentage of Revenue 2026 | 2025 | Increase (Decrease) 2026 vs 2025 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $17,643 | $18,036 | 6.8% | 6.9% | $(393) | (2.2)% |
| Government Solutions | 14,593 | 21,095 | 5.6% | 8.1% | (6,502) | (30.8)% |
| Parking Solutions | 5,327 | 6,374 | 2.1% | 2.4% | (1,047) | (16.4)% |
| Selling, general and administrative expenses by segment | 37,563 | 45,505 | 14.5% | 17.4% | (7,942) | (17.5)% |
| Other expenses | 5,875 | 2,252 | 2.3% | 0.8% | 3,623 | 160.9% |
| Total selling, general and administrative expenses | $43,438 | $47,757 | 16.8% | 18.2% | $(4,319) | (9.0)% |

31

*Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net.* Depreciation, amortization and (gain) loss on disposal of assets, net, decreased by $2.4 million to $26.9 million for the three months ended September 30, 2026 from $29.3 million for the same period in 2025.

*Interest Expense, Net.* Interest expense, net decreased by approximately $1.4 million from $16.4 million for the three months ended September 30, 2025 to $15.0 million for the same period in 2026. This was primarily attributable to a 25 basis-point reduction in the interest rate as a result of refinancing our 2021 Term Loan in October 2025 coupled with decreasing SOFR rates. See “*Liquidity and Capital Resources”* below.

*Loss on Extinguishment of Debt.* We recorded less than $0.1 million of loss on extinguishment of debt during the three months ended September 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 $4.7 million for the three months ended September 30, 2026 compared to $6.3 million for the three months ended September 30, 2025. This was primarily attributable to a decrease in volume rebates earned from total spend on credit card transactions due to decreased tolling and travel activity.

*Income Tax Provision.* Income tax provision was $14.9 million representing an effective tax rate of 26.9% for the three months ended September 30, 2026 compared to a tax provision of $17.8 million, with an effective tax rate of 27.6% for the same period in 2025.

*Net Income.* We had net income of $40.4 million for the three months ended September 30, 2026, as compared to a net income of $46.8 million for the three months ended September 30, 2025. The $6.4 million decrease was primarily due to the increase in cost of service revenue, excluding depreciation and amortization expense and decrease in service revenue and the other statement of operations activity discussed above.

### Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025

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)*

|  | Nine Months Ended September 30, 2026 | 2025 | Percentage of Revenue 2026 | 2025 | Increase (Decrease) 2026 vs 2025 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Service revenue | $700,007 | $678,598 | 93.8% | 94.1% | $21,409 | 3.2% |
| Product sales | 46,027 | 42,619 | 6.2% | 5.9% | 3,408 | 8.0% |
| **Total revenue** | 746,034 | 721,217 | 100.0% | 100.0% | 24,817 | 3.4% |
| Cost of service revenue, excluding depreciation and amortization | 36,489 | 18,658 | 4.9% | 2.6% | 17,831 | 95.6% |
| Cost of product sales | 39,963 | 29,804 | 5.4% | 4.1% | 10,159 | 34.1% |
| Operating expenses | 266,924 | 243,092 | 35.8% | 33.7% | 23,832 | 9.8% |
| Selling, general and administrative expenses | 128,281 | 147,724 | 17.2% | 20.5% | (19,443) | (13.2)% |
| Depreciation, amortization and (gain) loss on disposal of assets, net | 85,405 | 86,551 | 11.4% | 12.0% | (1,146) | (1.3)% |
| Goodwill impairment | 64,037 | — | 8.6% | 0.0% | 64,037 | 100.0% |
| Impairment of intangible assets | 40,354 | — | 5.4% | 0.0% | 40,354 | 100.0% |
| Total costs and expenses | 661,453 | 525,829 | 88.7% | 72.9% | 135,624 | 25.8% |
| **Income from operations** | 84,581 | 195,388 | 11.3% | 27.1% | (110,807) | (56.7)% |
| Interest expense, net | 45,920 | 49,629 | 6.2% | 6.9% | (3,709) | (7.5)% |
| Loss on extinguishment of debt | — | 69 | 0.0% | 0.0% | (69) | (100.0)% |
| Other income, net | (14,878) | (16,410) | (2.0)% | (2.3)% | 1,532 | (9.3)% |
| Total other expenses | 31,042 | 33,288 | 4.2% | 4.6% | (2,246) | (6.7)% |
| Income before income taxes | 53,539 | 162,100 | 7.1% | 22.5% | (108,561) | (67.0)% |
| Income tax provision | 34,585 | 44,347 | 4.6% | 6.2% | (9,762) | (22.0)% |
| **Net income** | $18,954 | $117,753 | 2.5% | 16.3% | $(98,799) | (83.9)% |

32

*Service Revenue*. Service revenue increased by $21.4 million, or 3.2%, to $700.0 million for the nine months ended September 30, 2026 from $678.6 million for the nine months ended September 30, 2025, representing 93.8% and 94.1% of total revenue, respectively. The following table depicts service revenue by segment:

*($ in thousands)*

| Service revenue | Nine Months Ended September 30, 2026 | 2025 | Percentage of Revenue 2026 | 2025 | Increase (Decrease) 2026 vs 2025 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $313,201 | $327,735 | 42.0% | 45.4% | $(14,534) | (4.4)% |
| Government Solutions | 335,586 | 300,246 | 45.0% | 41.6% | 35,340 | 11.8% |
| Parking Solutions | 51,220 | 50,617 | 6.8% | 7.1% | 603 | 1.2% |
| Total service revenue | $700,007 | $678,598 | 93.8% | 94.1% | $21,409 | 3.2% |

Commercial Services service revenue decreased by $14.5 million, or 4.4%, from $327.7 million for the nine months ended September 30, 2025 to $313.2 million for the nine months ended September 30, 2026. The decrease was primarily driven by a $11.5 million reduction in RAC tolling revenue due to the effect of contract extensions entered into with two of our significant customers on materially less favorable terms, and fleet volume fluctuations with one significant customer, with the remaining decrease primarily driven by lower revenue generated from our FMC customers due to customer churn.

Government Solutions service revenue increased by $35.3 million, or 11.8%, from $300.2 million for the nine months ended September 30, 2025, to $335.6 million for the nine months ended September 30, 2026. The increase was primarily driven by $21.1 million in revenue from speed, bus lane, red light, school bus and other services outside of NYCDOT. The remaining $14.2 million in growth comes from installation revenue on new camera installations for NYCDOT, net of price changes on the new contract.

Parking Solutions service revenue increased to $51.2 million for the nine months ended September 30, 2026, from $50.6 million for the nine months ended September 30, 2025. The increased revenue was primarily driven by SaaS product offerings, partially offset by a decrease in subscription and professional services related to parking management solutions.

*Product Sales*. Product sales were $46.0 million and $42.6 million for the nine months ended September 30, 2026 and 2025, respectively. Product sales increased by $3.4 million, which was due to a $3.9 million increase in product sales in the Government Solutions segment partially offset by a $0.5 million decrease in product sales in 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 $18.7 million for the nine months ended September 30, 2025 to $36.5 million for the same period in 2026, mainly due to increased recurring service costs and NYCDOT installation service costs.

*Cost of Product Sales.* Cost of product sales increased by $10.2 million from $29.8 million in the nine months ended September 30, 2025 to $40.0 million in the nine months ended September 30, 2026, which was due to increased product sales compared to the same period in 2025.

*Operating Expenses*. Operating expenses increased by $23.8 million, or 9.8%, from $243.1 million for the nine months ended September 30, 2025 to $266.9 million for the nine months ended September 30, 2026. The increase in 2026 compared to the prior year period was primarily in the Government Solutions segment for approximately $20.1 million driven by increases in subcontractor, information technology, rent, and recurring services costs and approximately $3.0 million in the Parking Solutions segment driven by wages, information technology and subcontractor costs. Operating expenses as a percentage of total revenue increased from 33.7% to 35.8% for the nine months ended September 30, 2025 and 2026, respectively. The following table presents operating expenses by segment:

*($ in thousands)*

| Operating expenses | Nine Months Ended September 30, 2026 | 2025 | Percentage of Revenue 2026 | 2025 | Increase (Decrease) 2026 vs 2025 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $72,181 | $71,996 | 9.7% | 10.0% | $185 | 0.3% |
| Government Solutions | 175,461 | 155,344 | 23.5% | 21.5% | 20,117 | 12.9% |
| Parking Solutions | 14,694 | 11,699 | 2.0% | 1.6% | 2,995 | 25.6% |
| Operating expenses by segment | 262,336 | 239,039 | 35.2% | 33.1% | 23,297 | 9.7% |
| Other expenses | 4,588 | 4,053 | 0.6% | 0.6% | 535 | 13.2% |
| Total operating expenses | $266,924 | $243,092 | 35.8% | 33.7% | $23,832 | 9.8% |

*Selling, General and Administrative Expenses.* Selling, general and administrative expenses decreased to $128.3 million for the nine months ended September 30, 2026 compared to $147.7 million for the same period in 2025. This was primarily due to a $11.4 million decrease in stock-based compensation, a $9.1 million decrease in wages and benefits expense, a $6.8 million decrease related to a legal settlement finalized in February 2026 and a $4.5 million decrease in credit loss expense partially offset by a $13.6 million increase in expenses related to organization restructuring and executive transition costs compared to the same period in the prior year. Selling, general and administrative expenses as a percentage of total revenue decreased from 20.5% to 17.2% for the nine months ended September 30, 2025 and 2026, respectively. The following table presents selling, general and administrative expenses by segment:

*($ in thousands)*

| Selling, general and administrative expenses | Nine Months Ended September 30, 2026 | 2025 | Percentage of Revenue 2026 | 2025 | Increase (Decrease) 2026 vs 2025 $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial Services | $53,015 | $56,441 | 7.1% | 7.8% | $(3,426) | (6.1)% |
| Government Solutions | 50,244 | 58,058 | 6.7% | 8.1% | (7,814) | (13.5)% |
| Parking Solutions | 16,847 | 20,132 | 2.3% | 2.8% | (3,285) | (16.3)% |
| Selling, general and administrative expenses by segment | 120,106 | 134,631 | 16.1% | 18.7% | (14,525) | (10.8)% |
| Other expenses | 8,175 | 13,093 | 1.1% | 1.8% | (4,918) | (37.6)% |
| Total selling, general and administrative expenses | $128,281 | $147,724 | 17.2% | 20.5% | $(19,443) | (13.2)% |

*Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net*. Depreciation, amortization and (gain) loss on disposal of assets, net, decreased by $1.2 million to $85.4 million for the nine months ended September 30, 2026 from $86.6 million for the same period in 2025. This was primarily due to a decrease in intangible asset amortization as a result of the impairment recorded in June 2026, partially offset by an increase in depreciation expense related to equipment, internally developed software and vehicles in the 2026 period compared to the 2025 period.

*Interest Expense, Net*. Interest expense, net decreased by approximately $3.7 million from $49.6 million for the nine months ended September 30, 2025 to $45.9 million for the same period in 2026. This was primarily attributable to a 25 basis-point reduction in the interest rate as a result of refinancing our 2021 Term Loan in October 2025 coupled with decreasing SOFR rates. See “*Liquidity and Capital Resources”* below.

*Goodwill Impairment*. We recorded an impairment loss of $64.0 million for the nine months ended September 30, 2026, as a result of the May 2026 interim impairment assessment of goodwill in our Parking Solutions segment. See Note 4, *Goodwill and Intangible Assets*, for additional information.

*Impairment of Intangible Assets*. We recorded an impairment loss of $40.4 million for the nine months ended September 30, 2026, as a result of the May 2026 assessment of long-lived assets in our Parking Solutions segment. See Note 4, *Goodwill and Intangible Assets*, for additional information.

*Loss on Extinguishment of Debt*. We recorded less than $0.1 million of loss on extinguishment of debt during the nine months ended September 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 $14.9 million for the nine months ended September 30, 2026 compared to $16.4 million for the nine months ended September 30, 2025. This was primarily attributable to a decrease in volume rebates earned from total spend on credit card transactions due to decreased tolling and travel activity.

*Income Tax Provision*. Income tax provision was $34.6 million representing an effective tax rate of 64.6% for the nine months ended September 30, 2026 compared to a tax provision of $44.3 million, with an effective tax rate of 27.4% for the same period in 2025. The increase in effective tax rate variance was primarily driven by the goodwill impairment recorded for the nine months ended September 30, 2026, which is not deductible for tax purposes.

*Net Income*. We had net income of $19.0 million for the nine months ended September 30, 2026, as compared to a net income of $117.8 million for the nine months ended September 30, 2025, primarily due to impairment on goodwill and intangible assets recorded for the nine months ended September 30, 2026, and an increase in operating expenses, partially offset by a decrease in selling, general and administrative expenses and the other statement of operating activity discussed above.

### Liquidity and Capital Resources

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

We believe that our existing cash and cash equivalents, cash flows provided by operating activities, and our ability to borrow under our Amended 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 Amended 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 Amended Revolver to meet expected obligations as they come due.

We originally entered into the Revolver in March 2018 and increased the borrowing capacity thereunder to $125.0 million in May 2025 pursuant to an amendment thereto. In fiscal year 2025, we amended and restated the Revolver and entered into the Amended and Restated Revolving Credit Agreement which increased the existing commitment from $125.0 million to $150.0 million and extended the maturity date to October 17, 2030. As of September 30, 2026, we had no outstanding borrowings and $127.3 million available for borrowing, net of letters of credit, under our Amended Revolver. Our cash on hand was $137.0 million as of September 30, 2026.

In fiscal year 2025, we refinanced the existing senior secured term loans under the 2021 Term Loan in an aggregate outstanding principal amount of approximately $688.8 million with a new senior secured term loan of the same principal amount maturing on October 15, 2032 and reduced the interest rate by 0.25%. We made quarterly repayments totaling $5.2 million on our Amended Term Loan during the nine months ended September 30, 2026, and as a result, the total principal outstanding on the Amended Term Loan was $681.9 million as of September 30, 2026.

At September 30, 2026, the tax receivable agreement liability was approximately $38.7 million. We expect to make payments of approximately $5.4 million per year for the next seven years and approximately $1.0 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. In December 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 of Class A Common Stock calculated using a volume-weighted average price over the term of the ASR agreement. All repurchased shares were subsequently retired. The prior repurchase authorization expired on April 30, 2025.

In May 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 over an 18-month period. On October 23, 2025, our Board of Directors authorized the repurchase of up to an additional $150.0 million of our outstanding shares of Class A Common Stock under the existing May 2025 program, providing us with $250.0 million available for repurchases. During the fourth quarter of fiscal year 2025, we paid $133.4 million to repurchase 6,028,853 shares of our Class A Common Stock through open market transactions. All repurchased shares were subsequently retired.

During the nine months ended September 30, 2026, we paid $50.2 million to repurchase 2,215,800 shares of our Class A Common Stock through open market transactions, which were subsequently retired. In addition, we recorded approximately $0.5 million within accrued liabilities on the condensed consolidated balance sheets as of September 30, 2026 for direct costs related to the excise tax payable on net share repurchases. During the nine months ended September 30, 2026, we made approximately $1.4 million of excise tax payments. As of September 30, 2026, $66.3 million remains available under our authorized share repurchase program.

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

*($ in thousands)*

|  | Nine Months Ended September 30, 2026 | 2025 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $211,775 | $215,828 |
| Net cash used in investing activities | (79,658) | (84,653) |
| Net cash used in financing activities | (60,666) | (13,320) |

### Cash Flows from Operating Activities

Cash provided by operating activities decreased by $4.0 million from $215.8 million for the nine months ended September 30, 2025 to $211.8 million for the nine months ended September 30, 2026. Net income year-over-year decreased by $98.8 million, from $117.8 million in 2025 to $19.0 million in 2026. The aggregate adjustments to reconcile net income to net cash provided by operating activities increased $74.5 million mainly due to the impairment on goodwill and intangible assets recorded for the current period, partially offset by a decrease in stock-based compensation, share-based proceeds acquired from a legal settlement finalized in February 2026, a decrease in deferred income taxes and credit loss expense. The aggregate changes in operating assets and liabilities increased by $20.3 million in 2026 compared to the prior year primarily due to a decrease in the net use of working capital, of which, the majority is attributable to a decrease in accounts receivable and an increase in other liabilities, partially offset by an increase in unbilled receivables and inventory. The increase in unbilled receivables was primarily due to the approximately $55.6 million of unbilled revenue related to NYCDOT as of September 30, 2026.

### Cash Flows from Investing Activities

Cash used in investing activities was $79.7 million and $84.7 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease in cash used was primarily driven by a $4.7 million decrease for purchases of installation and service parts and property and equipment mainly for the Government Solutions segment compared to the same period in the prior year.

### Cash Flows from Financing Activities

Cash used in financing activities was $60.7 million and $13.3 million for the nine months ended September 30, 2026 and 2025, respectively. The increased use in cash from financing activities was mainly due to $51.6 million of share repurchases in fiscal year 2026 and no comparable repurchases in the prior year period.

### Debt, Net

#### 2021 Term Loan and Amended Term Loan

In March 2021, VM Consolidated, our wholly owned subsidiary, entered into the 2021 Term Loan with a syndicate of lenders. The 2021 Term Loan had 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 amortized over the life of the 2021 Term Loan. Such offering discount costs and deferred financing costs have subsequently been adjusted as needed as a result of refinancing activity discussed below which prompted re-evaluation of unamortized amounts on a lender-by-lender basis.

In October 2025, VM Consolidated and certain of our subsidiaries entered into the Amendment and Restatement Agreement No. 2 to the Amended and Restated First Lien Term Loan Credit Agreement dated as of March 26, 2021, to refinance the existing senior secured term loans in an aggregate outstanding principal amount of approximately $688.8 million with a new senior secured term loan of the same principal amount maturing on October 15, 2032. The proceeds from the Amended Term Loan were used in their entirety to prepay in full the outstanding principal amount of the existing term loan under the 2021 Term Loan agreement.

The Amended Term Loan bears interest at a per annum rate equal to SOFR plus an applicable margin of 2.00%, or a base rate plus an applicable margin of 1.00%. As of September 30, 2026, the interest rate on the Amended Term Loan was 5.9%. The Amended Term Loan amortizes in equal quarterly installments in aggregate amounts equal to 1.00% of the original principal amount of the Amended Term Loan beginning March 31, 2026, with the balance payable at maturity, is subject to mandatory prepayment provisions upon the occurrence of certain specified events, and is repayable at any time at the borrowers’ election. We evaluated the refinancing transactions on a lender-by-lender basis and accounted accordingly for debt extinguishment and debt modification costs (for the portion of the transactions that did not meet the accounting criteria for debt extinguishment).

During the nine months ended September 30, 2026, we made quarterly repayments totaling $5.2 million on the Amended Term Loan. During the nine months ended September 30, 2025, we made voluntary prepayments totaling $6.8 million on the 2021 Term Loan. As a result, the total principal outstanding was $681.9 million as of September 30, 2026.

We recorded less than $0.1 million of loss on extinguishment of debt during both the three and nine months ended September 30, 2025, related to the write-off of pre-existing deferred financing costs and discounts in connection with the early repayments.

In addition, the Amended Term Loan requires mandatory prepayments equal to the product of the excess cash flows of the Company (as defined in the Amended and Restated 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 in the Amended and Restated 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 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 face value plus accrued and unpaid interest.

#### The Revolver

We entered into a Revolving Credit Agreement in March 2018 with a commitment of up to $75.0 million available for loans and letters of credit. In May 2025, pursuant to an amendment thereto, such commitment was increased to $125.0 million. On October 17, 2025, certain of our direct and indirect wholly owned subsidiaries, including VM Consolidated, entered into the Amended and Restated Revolving Credit Agreement to amend and restate the Revolver. The Amended and Restated Revolving Credit Agreement provides for a $150.0 million senior secured asset-based revolving credit facility with a $35.0 million sublimit for the issuance of letters of credit, and matures on October 17, 2030 (subject to an earlier maturity date in certain circumstances).

Outstanding borrowings under the Amended Revolver accrue interest at per annum rate equal to SOFR plus a margin ranging from 1.25% to 1.75% or a base rate plus a margin ranging from 0.25% to 0.75%, in each case, depending on the quarterly average undrawn availability under the Amended Revolver in the prior quarter. The Amended and Restated Revolving Credit Agreement also provides for the option, subject to receiving additional commitments from lenders and the satisfaction of certain conditions, to increase the loan commitments under the Amended Revolver by up to an amount equal to the greater of (x) $75.0 million and (y) the amount by which the borrowing base exceeds the aggregate commitments at such time. There were no outstanding borrowings on the Amended Revolver as of September 30, 2026 or December 31, 2025. The availability to borrow was $127.3 million at September 30, 2026, calculated as our borrowing base which consists of certain eligible accounts receivable and inventory balances, less any outstanding borrowings and letters of credit up to the maximum commitment available.

A commitment fee on the unused portion of the Amended Revolver is payable quarterly at (x) an annual rate of 0.375%, when quarterly average usage was less than 50% of the loan commitments in the prior quarter or (y) an annual rate of 0.250%, when quarterly average usage of the Amended Revolver was greater than or equal to 50% of the loan commitments in the prior quarter. We are also required to pay participation and fronting fees at 1.38% on $4.9 million of outstanding letters of credit as of September 30, 2026.

All borrowings and other extensions of credits under the Amended Term Loan, Senior Notes and the Amended 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 the Company’s assets are pledged as collateral under the Amended Term Loan and the Amended Revolver. At September 30, 2026, we were compliant with all debt covenants in our debt agreements.

From time to time, we enter into equipment financing arrangements in the normal course of business, including certain equipment leases and purchases accounted for as financing arrangements. Amounts outstanding under these arrangements are included in “Other debt” in Note 6, *Debt, Net*, in Part I, Item 1, Financial Statements, and were not material to our overall financial position, liquidity, or capital resources as of September 30, 2026.

#### Interest Expense, Net

We recorded interest expense, including amortization of deferred financing costs and discounts, of $15.0 million and $16.4 million for the three months ended September 30, 2026 and 2025, respectively, and $45.9 million and $49.6 million for the nine months ended September 30, 2026 and 2025, respectively.

### Off-Balance Sheet Arrangements

We do not have any material off-balance sheet financing arrangements as of September 30, 2026.

### 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, 744 characters.

We are exposed to interest rate risk due to the variable interest rates on the Amended Term Loan and Amended Revolver 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 Amended Term Loan, which has an outstanding balance of $681.9 million at September 30, 2026. As of September 30, 2026, the interest rate on the Amended Term Loan was 5.9%.

Based on the September 30, 2026 balance outstanding, each 1% movement in interest rates will result in an approximately $6.8 million change in annual interest expense.

## Controls and procedures

As filed, 1,405 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 Interim 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 September 30, 2026. 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

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 September 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting

## Risk factors

As filed, 10,814 characters.

Part I, Item 1A. “Risk Factors” in our Annual Report includes a discussion of our risk factors. Other than the risk factors below, 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.

***Our Commercial Services and Government Solutions segments have several large customers that account for a significant portion of our revenue, and a reduction in demand, materially less favorable terms or pricing in new or amended agreements as compared to the current agreements, or the loss, even temporarily, of one or more of such customers has and could have in the future a material adverse effect on our business.***

Our business experiences varying levels of customer concentration. For example, in our Government Solutions segment, NYCDOT represented approximately 24.1% and 19.5% of our total revenues for the quarters ended September 30, 2026 and 2025, respectively. We entered into a new contract with NYCDOT, effective January 1, 2026, to manage New York City’s automated enforcement camera safety programs for a five-year period. The terms of the new contract are materially different than our prior contract with NYCDOT, including service level agreements, service credits, liquidated damages, cybersecurity, and subcontracting requirements. If we do not successfully perform the contract pursuant to its terms, it could have a material adverse effect on our business, financial condition, and results of operations. We may continue to rely on a small number of customers in our Government Solutions segment to represent a significant portion of our total revenues in any given period. The loss of any of our top Government Solutions customers could have a material adverse effect on our business, financial condition, and results of operations.

We also experience customer concentration in our Commercial Services segment. Three of our Commercial Services customers collectively accounted for 29.5% and 38.0% of our total revenues for the quarters ended September 30, 2026 and

2025, respectively. In May 2026, one of our three significant Commercial Services customers issued a termination notice with respect to its contract with us. The customer subsequently withdrew its termination notice in July 2026 and entered into a seven-year contract extension on terms that were materially less favorable to us as compared to the prior agreement, including an option for the customer to modulate its fleet volume. During the third quarter of 2026, the customer significantly reduced its fleet volume under the contract and on October 2, 2026, we exercised our option to terminate the contract, effective January 30, 2027. We may be unable to replace the revenue that was expected under this contract on a timely basis or at all. A second significant Commercial Services customer entered into a five-year contract extension, also on terms materially less favorable to us than those of the prior agreement and with fleet volume modulation rights that are subject to terms and conditions set forth in the agreement. In addition, the contract with the third significant Commercial Services customer is approaching renewal, and we are following the customer's procurement process. We may not be successful in retaining the contract or may retain it only on terms less favorable to us than the current agreement.

If we are not successful in retaining the third customer contract or if any renewal is on less favorable terms than the current agreement and/or if either of the remaining contracts is terminated, this would have a material adverse effect on our business, financial condition, and results of operations.

***We are in the midst of CEO and CFO transitions, and we depend on the services of key executives. Any inability to successfully transition leadership or to attract and retain key management personnel could have a material adverse effect on our business.***

We believe that our future success depends upon the services of our executive management team, who have critical experience and relationships that we rely on to implement our business plan and growth strategy. From time to time, there have been and may be future changes in our executive management team resulting from the hiring or departure of these executives. Following the departure of our former Chief Executive Officer in May 2026, we have operated under the leadership of an Interim President and Chief Executive Officer. On September 30, 2026, our Board appointed Jon Newhard as President and Chief Executive Officer, effective November 1, 2026. In addition, on October 8, 2026, Craig Conti notified us of his resignation as Executive Vice President and Chief Financial Officer, effective November 4, 2026, and the Board has retained Spencer Stuart to conduct a search for a permanent Chief Financial Officer. The Board has appointed Matthew Kvarda, a Managing Director with Alvarez & Marsal North America, LLC (“***A&M”***), as Interim Chief Financial Officer, effective November 5, 2026. Mr. Kvarda will provide his services pursuant to an engagement letter with A&M, will remain an employee of A&M, and is not expected to serve as our permanent Chief Financial Officer. Either we or A&M may terminate the engagement on short notice, and an interim officer may be less familiar with our business, systems and personnel than a permanent officer. We cannot predict the duration of the search or whether we will be able to identify and successfully onboard a qualified successor on a timely basis. Effective succession planning and leadership transitions are complex undertakings, and we cannot assure you that Mr. Newhard’s integration into the Company, or the transition of our Chief Financial Officer role, including the transition from an interim to a permanent Chief Financial Officer, will be successful or that our new leadership will be able to effectively implement our business plan and growth strategy.

The concurrent transition of our principal executive officer and principal financial officer may also place additional demands on our management team, including with respect to our financial reporting processes and internal control over financial reporting. Any disruption arising from these transitions, including any related changes to our strategy or management team, or any perception by employees, customers, investors, or other stakeholders that our leadership is unstable, could adversely affect our business.

Additionally, as our business grows, we may need to attract and hire additional management personnel. We have employment agreements with some members of senior management that include non-competition provisions; however, we cannot prevent our executives from terminating their employment and may not be able to fully enforce non-competition provisions limiting former executives or key personnel from competing with us following any departure. Moreover, we do not carry “key-man” life insurance on the lives of our executive officers, employees, or advisors. Our ability to retain our key management personnel or to identify and attract additional management personnel or suitable replacements is dependent on a number of factors, including the competitive nature of the employment market and our industry. Any failure to retain key management personnel or to attract additional or suitable replacement personnel has and in the future could cause uncertainty among investors, employees, customers, and others concerning our future direction and performance and could have a material adverse effect on our business, financial condition, and results of operations.

***Our goodwill and intangible assets have been subject to impairment and may be subject to further impairment in the future, which could have a material adverse effect on our results of operations, financial condition, or future operating results.***

We perform a goodwill and long-lived asset impairment test for each reporting unit annually, or more frequently if indicators for potential impairment exist. Indicators that are considered include significant changes in performance relative to expected operating results, significant negative industry or economic trends, or a significant decline in our stock price, and/or market capitalization for a sustained period of time. In addition, we assess the current and future economic outlook for our reporting units during the fiscal year. While we believe the assumptions used in determining whether there was impairment and the amount of any resulting impairment were reasonable and commensurate with the views of a market participant, changes in key assumptions in the future, including increasing the discount rate, lowering forecasts for revenue and operating margin, customer attrition, or lowering the long-term growth rate, could result in additional charges; similarly, one or more changes in these assumptions in future periods due to changes in circumstances could result in future impairments in one or more reporting units. We recognized a $40.4 million impairment of customer relationship, trademark and developed technology intangible assets during the nine months ended September 30, 2026 in connection with our assessment that the estimated undiscounted cash flows of the Parking Solutions asset group were less than its carrying amount. We also recorded a $64.0 million impairment to goodwill in our Parking Solutions segment during the nine months ended September 30, 2026 in connection with our assessment that the Parking Solutions reporting unit’s carrying value exceeded the estimated fair value and we cannot predict if or when additional future goodwill impairments may occur. Any future goodwill impairments could have material adverse effects on our operating income, net assets, or our cost of, or access to, capital, which could harm our business. See Note 4, *Goodwill and Intangible Assets*, in Part I, Item 1, Financial Statements, for additional information.

***We are subject to securities litigation, which is expensive and could adversely impact our business.***

In June 2026, a putative securities class action complaint was filed against us and certain of our officers. The case is pending. See Note 13, *Commitments and Contingencies*, included in Part I, Item 1, Financial Statements in this Report for more information. Litigation of this type is expensive and could result in substantial cost and divert resources from our business regardless of the outcome of such litigation, which could have an adverse effect on our business, financial condition, results of operations or prospects. Any adverse determination in litigation could also subject us to significant liabilities.

Filed Oct 30, 2026.
Source: SEC EDGAR, the filing index for accession 0001628280-26-068455. Last ingested by Listed: Oct 31, 2026, 03:18 ET. No prices; not investment advice.