As travel has picked up, so have the numbers of tolls, tickets and parking meters to be paid.
Verra Mobility reported that its total revenue for the first quarter was up 90% year over year. The company’s organic service revenue grew 45% mainly due to improved travel demand. Two companies it recently acquired also contributed to the expansion.
“All areas of our business are benefiting from strong macro trends, including a significant increase in travel that is driving our Commercial Services performance,” Verra Mobility CEO David Roberts said in a press release.
Cashless Tolls, Toll Rates Are Increasing
The Commercial Services operating segment offers automated toll and violations management and title and registration solutions to rental car companies and other owners of large fleets.
The revenue in that segment was up 61% year over year. Compared to the pre-pandemic first quarter of 2019, revenue was up 17%.
Company executives reported that growth was helped by improved travel demand that led to increased rental car demand, with rental car companies seeing a significant increase in demand compared to both the previous quarter and the previous year.
“While rental car volumes remain below pre-pandemic levels, the percentage of cashless tolls, toll rates, billable days and customer adoption trends are all increasing,” Verra Mobility Chief Financial Officer Craig Conti said during the company’s quarterly earnings call.
More Photo Enforcement Is Being Deployed
Photo enforcement expansion efforts in New York City contributed to 28% year-over-year revenue growth at another of Verra Mobility’s operating segments, Government Solutions, which offers technology that enables photo enforcement related to speed, red light, school bus and city bus lane management.
“In general, the market for photo enforcement appears to be increasing at a faster pace, presumably after many municipalities slowed down the procurement activities during COVID,” Roberts said during the call.
Another segment, Parking Solutions, provides software and hardware for parking management. This segment is new for Verra Mobility and was formed by its acquisition of T2 Systems in December. In this segment, the company said it expects low double-digit revenue growth.
“I am very pleased with our financial results across all our segments, and we are experiencing solid increases to bookings and our sales pipelines, both of which are leading indicators for future growth,” Roberts said in the press release.
Cities, Fleets Are Looking for Smart Mobility
Looking ahead, the company sees strong secular growth drivers, including a shift to cashless tolling, strong demand for photo enforcement to improve safety and growing opportunities in the management of curbside parking, it said in a presentation released in conjunction with the earnings call. As a result, it expects continued revenue growth in all three segments.
Following two recent acquisitions, Verra Mobility is also always considering more.
“We continue to look across the ecosystem of smart mobility,” Roberts said during the call. “I think one is anything that we can continue to look at that would bolster our commercial fleet business in terms of other more connected vehicle plays that are relevant to fleets not only today but in the future. And then continuing to look for the next set of technologies that are going to help cities drive safety into their community. ”