10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission File Number 001-37979

VERRA MOBILITY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	81-3563824
(State of Incorporation)	(I.R.S. Employer Identification No.)
1150 North Alma School Road Mesa, Arizona	85201
(Address of Principal Executive Offices)	(Zip Code)

(480) 443-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

(Title of Each Class)	(Trading Symbol)	(Name of Each Exchange on Which Registered)
Class A Common Stock, par value $0.0001 per share	VRRM	Nasdaq Capital Market
Warrants to purchase Class A Common Stock	VRRMW	OTC Pink Marketplace

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filling reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting and non‑voting common equity held by non‑affiliates of the registrant on June 30, 2022, computed by reference to the closing price reported on the Nasdaq Capital Market on such date was $2,395,635,197 (152,491,101 shares at a closing price per share of $15.71).

As of February 24, 2023, the registrant had 148,981,250 shares of Class A Common Stock, par value $0.0001 per share, issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s proxy statement to be filed in connection with its annual meeting of stockholders to be held May 23, 2023 are incorporated by reference into Part III of this Form 10-K.

2

3

VERRA MOBILITY CORPORATION

FORM 10-K

For the Fiscal Year Ended December 31, 2022

INDEX

PART I	6
Item 1. Business	6
Item 1A. Risk Factors	12
Item 1B. Unresolved Staff Comments	33
Item 2. Properties	33
Item 3. Legal Proceedings	34
Item 4. Mine Safety Disclosures	34
PART II	35
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	35
Item 6. Selected Financial Data	38
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	55
Item 8. Financial Statements and Supplementary Data	56
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	106
Item 9A. Controls and Procedures	106
Item 9B. Other Information	107
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	107
PART III	108
Item 10. Directors, Executive Officers and Corporate Governance	108
Item 11. Executive Compensation	108
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	108
Item 13. Certain Relationships and Related Transactions, and Director Independence	108
Item 14. Principal Accountant Fees and Services	108
PART IV	109
Item 15. Exhibit and Financial Statement Schedules	109
Item 16. Form 10-K Summary	115
SIGNATURES	116
POWER OF ATTORNEY	117
Appendix A, Schedule II	118

4

Cautionary Note Regarding Forward-Looking Statements

The discussions in this Annual Report on Form 10-K (“Annual Report”), as well as in our other filings with the Securities and Exchange Commission (the “SEC”) and other written and oral information we release, contain forward-looking statements within the meaning of federal securities laws. These forward-looking statements include, but are not limited to, statements concerning our future operating results and financial position, our strategy, expectations regarding demand and acceptance for our products, services and technologies, growth opportunities and trends in the markets in which we operate, future impacts to our business as a result of economic and market conditions, expected cost reductions, benefits and synergies related to our acquisitions and management’s plans and objectives. The words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” and “will,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on them. Actual events or results could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” in this Annual Report and in our other filings with the SEC. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law.

When we refer to “Verra Mobility,” the “Company,” “we,” “us,” or “our” in this Annual Report, we are referring to Verra Mobility Corporation and its consolidated subsidiaries.

5

PART I

Item 1. Business

Overview

We are a leading provider of smart mobility technology solutions 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 fleet owners such as rental car companies (“RACs”) and fleet management companies (“FMCs”), governments, universities, parking operators, healthcare facilities, transportation hubs and other violation-issuing authorities.

Our vision is to develop and use technology and data intelligence to make transportation safer, smarter and more connected.

Segments

Our solutions are offered through three segments: (i) Commercial Services, (ii) Government Solutions and (iii) Parking Solutions.

Commercial Services

Our Commercial Services segment generated approximately $326.0 million in revenue for 2022, or approximately 44.0% of our total revenue. We believe that our Commercial Services segment is the market-leading provider of automated toll and violations management and title and registration solutions to RACs, FMCs and other large fleet owners in North America. In Europe, our Commercial Services segment provides violations processing through Euro Parking Collection plc (“EPC”) and consumer tolling services through Pagatelia S.L.U. (“Pagatelia”). We have long-standing relationships with, among others, the three largest RACs in the United States, Avis Budget Group, Enterprise Holdings, Inc. and The Hertz Corporation. We also have relationships with key European RACs and the five largest FMCs in the United States. Through our established relationships with individual tolling authorities throughout the United States, we provide an automated and outsourced administrative solution for our customers while also providing a value-added convenience for vehicle drivers and benefits to the tolling and issuing authorities. Our toll and violations management solutions help ensure timely payment for tolls and violations incurred by our customers’ vehicles and perform timely transfers of liability on our customers’ behalf, and billing and collecting from the driver as applicable. We also manage regional toll transponder installation and vehicle association, a critical and highly complex process for RAC and FMC customers, to ensure that the transponder (and corresponding toll transactions) are associated with the correct vehicle.

Government Solutions

Our Government Solutions segment generated approximately $336.7 million in revenue for 2022, or approximately 45.4% of our total revenue. We believe our Government Solutions segment is the market-leading provider of automated safety solutions in the United States, Canada and Australia to state and local governments. In the United States, we provide government agencies with road safety cameras to detect and process traffic violations for red-light, speed, school bus, and city bus lanes. Our proprietary hardware and software technologies provide government agencies the information, data, and automated end-to-end administrative capabilities to enforce traffic violations through photo enforcement. On behalf of our customers, we install, maintain, and manage automated safety solution hardware and software that processes event data, applies customer specific rules and connects a traffic violation to the responsible driver or vehicle owner. Additionally, upon law enforcement’s determination that a violation has occurred, we offer an “end-to-end” solution to manage the citation mailing, billing, and other administrative tasks on behalf of our customers. For many international customers, we design, engineer, and maintain roadside photo enforcement technology, including both hardware and software, which is sold or licensed to government agencies and often maintained with maintenance contracts to support the technology.

Parking Solutions

We formed our Parking Solutions segment after our acquisition of T2 Systems Parent Corporation (“T2 Systems”) in December 2021. This segment generated approximately $79.0 million in revenue for 2022, or

6

approximately 10.6% of our total revenue. Our Parking Solutions segment is a North American leader of end-to-end commercial parking management solutions in the markets we serve. This segment serves over 2,000 customers in the university, municipal, healthcare and commercial operator markets. Our proprietary software and hardware technologies provides our customers with solutions needed to manage and monetize parking and enforcement operations. In 2022, we processed over 163 million transactions using our various parking solutions systems. Each need requires technology solutions for parking access and revenue control, single- and multi-space pay stations, integrated physical and mobile payments, back-office parking rate management, permit issuance and management, online citation payment, event parking, occupancy, and back-office management of violations, amongst other requirements.

Markets and Competition

There is no single competitor that provides a similarly broad suite of solutions across our business segments. However, in our Government Solutions segment, we face competition in certain automated safety solutions from other vendors in the areas of red-light, school bus, speed and bus lane photo enforcement. In our Commercial Services segment, we face competition from both our own customers, who may choose to invest in their own internal solutions, and vendors offering or seeking to offer new technologies or financial models, and we must continue to innovate to remain competitive. In Parking Solutions, we face competition from a variety of segment-specific competitors in our markets in the United States and Canada.

Tolling

The tolling industry is highly fragmented and complex, as it is comprised of more than 80 tolling operators with specific coverage regions and disparate technology platforms, processing requirements and business rules. We believe that as state and local governments fund a growing list of infrastructure, maintenance and construction projects, there will be an increase in the number of toll roads, including new express and high occupancy lanes in urban areas. We expect this trend will also increase utilization of dynamic tolling, which allows toll rates to fluctuate based on traffic trends and real-time congestion. In addition, 95% of toll road transactions in the United States are cashless or all-electronic payment. We believe that these trends create sizable opportunities for us to expand our tolling market presence while developing relationships with tolling authorities.

Commercial Fleet

Our Commercial Services customers consist of RACs, FMCs and other large fleet owners. The approximately $36 billion United States RAC industry is highly consolidated, with three companies, with which we have long-standing relationships, accounting for a significant majority of United States RAC revenues in 2022. We believe that the above-mentioned trends toward the use of toll roads additionally create significant opportunities for us to expand our fleet market presence while developing relationships with both new and existing RACs, FMCs, and other fleet consumers.

Automated Safety

As cities and municipalities wrestle with the evolving challenges of managing traffic congestion, road safety and accessible transportation networks, automated enforcement solutions continue to serve as an effective tool for comprehensive safety and mobility initiatives. In 2020, the Congressional Research Service found cameras to be an effective tool for law enforcement and other agencies to reduce the number of traffic-related violations, collisions, injuries and fatalities, and the American Association of State Highway and Transportation Officials has called on states to support greater use of automated speed enforcement. New York City’s Automated Speed Enforcement Program 2014-2020 Report, noted a 72% average reduction in dangerous speeding at its fixed camera locations. Additionally, programs like Vision Zero, a collaborative campaign helping communities reach their goals of eliminating all traffic fatalities and severe injuries, across most major U.S. cities and around the world, are driving capital investment to make meaningful strides in traffic safety. Public attention given to traffic safety issues for drivers, pedestrians, children, bicyclists and law enforcement is intensifying and governments are facing shortfalls in transportation revenue. In this context, smart technology solutions have emerged as an effective and revenue-positive method to address traffic safety issues. We believe that as public focus intensifies, the demand for our Government Solutions offerings will grow as well, and that we are positioned to take advantage of these opportunities.

7

Parking

The parking industry consists of a highly fragmented mix of end customers, including universities, municipalities, private operators, healthcare providers and airports, among other industries. These customers each have different parking needs such as off-street parking, on-street parking, permits, enforcement and consumer engagement. T2 Systems has customer relationships with approximately 30% of higher education institutions in its target tiers, according to internal analysis. The broader parking market in which T2 System’s operates – North American municipalities, universities and healthcare providers – represents up to a $4 billion market according to a 2021 market estimate. Parking Solutions market segments are focused on strategies to offset costs in reaction to downturns caused by the COVID-19 pandemic and market participants are struggling to attract and retain labor. At the same time, consumers are increasingly willing to adopt mobile solutions to simplify their transportation needs, creating market opportunities to advance self-service options. We believe that technology solutions that provide mobile-first, self-service offerings, improve operational efficiency, reduce reliance on parking-related labor, and commercial models that reduce up-front costs provide solutions for market needs and establish a long-term operating model.

Products

Commercial Services

Toll management solutions

We provide fully outsourced toll management solutions for our fleet owner customers, including RACs and FMCs, while also providing a value-added convenience for vehicle drivers via our established relationships and integrations with more than 50 individual tolling authorities throughout the United States. This comprehensive network allows RAC and FMC drivers the convenience of using cashless and all-electronic tolls. Additionally, this service helps prevent the liability and business disruption of costly toll violations incurred by vehicles owned by RAC and FMC customers and eliminates their need to manage a nationwide program internally. Our proprietary software technology and hardware allow us to effectively match a toll to the specific RAC or FMC vehicle and driver so that the toll can accurately and reliably be billed and collected on behalf of, or directly from, the RAC or FMC. Toll management solutions accounted for approximately 37.2% of our 2022 revenues.

Violations management solutions

Our violations management solutions process violations incurred by the drivers of RAC and FMC vehicles by working with more than 8,000 domestic violation-issuing authorities (more than 400 of which we are directly integrated with) to either pay the fine on behalf of the vehicle owner (for which we are able to bill the driver) or to transfer liability directly to the vehicle driver. Vehicle-issued violations include parking and photo enforcement violations. In Europe, we specialize in the identification, notification, and collection of unpaid traffic, parking and public transport related fees, charges, and penalties issued to foreign registered vehicles or persons on behalf of issuing authorities in 17 European countries. Violation management solutions accounted for approximately 4.6% of our 2022 revenues.

Title and registration solutions

Our title and registration solutions provide RAC and FMC customers with an integrated, end-to-end solution for managing vehicle titles and registrations and annual renewals. We provide automated title and registration solutions by leveraging connections with individual departments of motor vehicles for electronic title and registration processing in 20 states. Title and registration solutions accounted for approximately 2.2% of our 2022 revenues.

Government Solutions

We serve as a value-add partner to government agencies by providing photo enforcement solutions that promote traffic safety and reduce traffic violations. We work with our customers to identify problematic traffic areas and install, maintain and manage the technology platform needed to capture images or videos of drivers committing traffic violations. Red-light cameras are placed at intersections to capture vehicles running red lights. Similarly, speed safety cameras are used to capture vehicles exceeding speed limits, either on a fixed basis or in a mobile platform, and often in school zones. School bus cameras are fixed to the side of buses to capture vehicles passing school buses with extended stop arms. Finally, bus lane cameras are designed to capture vehicles illegally driving in restricted bus lanes.

8

For customers of our end-to-end solutions, we automatically send captured events to the designated enforcement agency of the customer, where an authorized individual determines if a violation occurred. Direct service revenue from red-light cameras, speed cameras, school bus cameras and city bus lane cameras accounted for approximately 38.3% of our 2022 revenues. Other segment service revenue consists primarily of ancillary revenue streams, which comprised 3.2% of total revenue. Product sales to customers are not recurring and are dependent on our customers’ needs, and account for 3.9% of total revenue. We expect product sales to be at levels below the preceding three years due to the completion of the New York City camera installation program in 2022

Parking Solutions

Parking Access and Revenue Control

Our Parking Access and Revenue Control (“PARCS”) technology solutions include both software and hardware offerings which work in concert to help our customers manage their gated, gateless and license plate recognition-based parking lot and parking garage needs. We have installed over 2,500 PARCS lanes to date. Our related software is the industry’s original hosted parking management software, which allows management of our customers’ PARCS solutions from a computer or mobile device.

Pay Stations

Our pay stations hardware technology has interoperability with over 50 third-party systems, as well as our PARCS and parking enforcement solutions. They are powered by a highly configurable and data driven software technology which supports the enforcement, mobile payments, and back-office and accounting needs of our customers. Our fleet of Pay Stations hardware exceeded 16,800 units at December 31, 2022.

Permits & Enforcement

Our Permits & Enforcement (“PE”) software technology solutions allow our customers to control who is parking in their facilities and when and where drivers can park using physical or virtual permits, allowing customers to control traffic and maximize their parking-related revenues. This technology also provides enforcement officers with real-time information and custom notifications on their enforcement devices. Citations management features also help to organize fine escalations and notification letters to parking violators.

Intellectual Property

We rely on a combination of patents, trademarks, trade secrets, copyrights and confidentiality agreements to protect our intellectual property. We take steps to protect new intellectual property to safeguard our ongoing technological innovations and strengthen our brand, and believe we take appropriate action against infringement or misappropriation of our intellectual property rights by others. We review third-party intellectual property rights to help avoid infringement, and to identify strategic opportunities.

Our general policy is to seek patent protection for our inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will improve our competitive position. We own approximately 82 U.S.- and foreign-issued patents and pending patent applications, including patents and rights to patent applications acquired through strategic transactions, which relate to various aspects of our products and technology. Our patent portfolio evolves as new patents are awarded to us and as older patents expire. Patents expire at various dates, generally 20 years from their original filing dates. While we believe that our portfolio of patents and applications has value, in general no single patent is essential to our business or any individual segment. In addition, any of our proprietary rights could be challenged, invalidated or circumvented, or may not provide significant competitive advantages.

Our business relies on both internally developed and externally licensed software, as well as internally, externally and co-developed hardware, to operate and provide our systems and deliver our services. We claim copyright on all internally developed software. We generally rely on common law protection for our copyrighted works. In addition, we rely on maintaining source code confidentiality to assure our market competitiveness. With respect to externally sourced software and hardware, we rely on contracts to retain our continued access for our business usage. From time to time, these agreements may expire or be subject to renegotiation.

We have approximately 214 registrations and pending applications in the United States and foreign jurisdictions for trademarks and service marks, reflecting our many products and services. These registrations and applications include our historic and acquired brands, as well as Verra Mobility. These marks may have a perpetual life, subject to

9

periodic renewal and may be subject to cancellation or invalidation based on certain use requirements and third-party challenges, or on other grounds. We vigorously enforce and protect our marks.

Government Regulation

We are subject to various local, state and national laws, regulations and administrative practices regulating matters such as data privacy, photo enforcement, consumer protection, procurement, licensing requirements, anti-corruption, equal employment, minimum wages, workplace health and safety, human rights and the environment, among others. Our operations are subject to regulation by various U.S. federal agencies, including the U.S. Department of Transportation, (“USDOT”), the Federal Trade Commission, (“FTC”), the Federal Communications Commission, the Consumer Product Safety Commission and the Environmental Protection Agency, as well as comparable international, state and local agencies, including the departments of transportation, departments of motor vehicles, and offices of inspectors general, and laws related to financial and banking regulations. Following the acquisition of EPC, Pagatelia and Redflex Holdings Limited, now known as Redflex Holdings Pty Ltd. (“Redflex”), and in connection with our European expansion efforts, we are subject to laws, regulations and administrative practices addressing many of these same matters in Europe, Australia and Canada, including those specifically relating to accessing and use of information obtained from vehicle licensing authorities, as well as European regulations to traffic enforcement and collections and other financial and banking regulations.

As part of our business, we collect, receive, process, use, transmit, disclose, and retain information relating to identifiable individuals (“personal information”) and, therefore, are subject to various laws protecting privacy and security of personal information, including but not limited to the U.S. Driver Privacy Protection Act, the General Data Protection Regulation (the “GDPR”) in the European Union (the “E.U.”), the Data Protection Act of 2018 in the United Kingdom, the Canadian Personal Information Protection and Electronic Documents Act, the Australia Privacy Act of 1988, New Zealand’s Privacy Act of 2020, the California Consumer Privacy Act (the “CCPA”) and other national and state privacy laws. We are also subject to similar restrictions and audit requirements pursuant to our contracts with the organizations from which we gain access to personal information, such as departments of motor vehicles and the National Law Enforcement Telecommunications System. Privacy laws and regulations are constantly evolving and changing, are subject to differing interpretations and may be inconsistent among countries and state and local jurisdictions, or conflict with other rules. As we expand our operations in foreign countries, or as U.S. federal or state law changes, our liability exposure and the complexity and cost of compliance with data and privacy requirements will increase. Laws and practices regarding handling and use of personal and other information by companies have also come under increased public scrutiny, and governmental authorities, consumer agencies and consumer advocacy groups have called for increased regulation and changes in industry practices. Our foreign photo enforcement programs are also subject to regulation in the various countries in which we operate.

Automated photo enforcement camera programs in the United States are typically regulated at the state and local level, not the federal level. Since 2010, there have been over 1,500 pieces of legislation introduced nationwide related to the photo enforcement industry. In general, photo enforcement is administrated by state, provincial or local government agencies, under either state enabling legislation or under home rule authority established under the relevant state constitution. Where enabling legislation is not required, local ordinances impose further restrictions within a given jurisdiction. Whether in a state requiring enabling legislation or in home-rule states where municipalities pass ordinances permitting photo enforcement, if the legislation or ordinance is subsequently repealed, not renewed if required, or if the authority for a local ordinance is revoked, photo enforcement activities would stop.

State and local regulation affects our Commercial Services segment as well, particularly with respect to tolling. Over the past few years, bills have been introduced in multiple states to limit whether and how much RACs can charge their customers for the use of a toll transponder, limit the administrative penalties and fees that can be assessed for processing tolls, and/or impose increased disclosure requirements on RACs with respect to tolling or violation processing fees. In addition, there has been an increase in interest and greater focus on RAC tolling programs from state Attorneys General related to tolling issues from a consumer protection perspective.

Our Government Solutions customers are typically government agencies, and our operations within this segment are therefore subject to various procurement laws pertaining to gifts and entertainment, payments of commissions and contingency fees, conflicts of interest, licensing and permitting requirements and other matters. These laws are overseen by different government agencies, depending on the jurisdiction, including departments of procurements services, contracting offices and offices of inspector general.

10

To successfully navigate this regulatory landscape, we have a dedicated government relations team that works with national, state and local policymakers, often with the help of lobbyists and consultants, to track and help support favorable camera-enforcement safety and toll-related legislative outcomes. Through this network, we have a presence in most states in which our Government Solutions and Commercial Services segments do business. These lobbying activities are subject to state and local regulations and registration requirements.

In connection with the installation of photo enforcement systems, we or our customers routinely obtain permits from various permitting authorities. As a government contractor providing photo enforcement services directly or through subcontractors (including design, engineering, construction, installation, and maintenance) in various locations throughout the United States and internationally, we are at times required to obtain licenses regarding general contracting, performance of engineering services, performance of electrical work, performance of private investigative work and processing license plate and related personal information, and periodically receive notices from regulatory authorities regarding these matters and inquiring as to our compliance with the applicable state, local and foreign laws and regulations.

We believe we are in substantial compliance with the laws and regulations that regulate our business. There are, however, significant uncertainties involving the application of various legal requirements, the violation of which could result in, among other things, fines, penalties, revocation of permits or licenses, cessation of operations in a given jurisdiction and other adverse consequences. See “Risk Factors” for a discussion of our regulatory risks.

Human Capital Management

Our employees are critical to our success as a leading provider of smart mobility solutions. To continue delivering high-quality solutions to our customers and succeed in our highly competitive and rapidly evolving market, it is critical that we continue to attract, retain and develop diverse groups of talented individuals at all levels of our organization.

As of December 31, 2022, we had 1,570 employees, comprised of 1,396 full-time employees and 174 part-time employees. Of our full-time employees, 1,032 were located in the United States and 364 were located internationally. None of our employees are represented by a labor union or covered by a collective bargaining agreement, except for our 20 employees in Staten Island, New York. We believe our relations with our employees are good, and we have not experienced a strike or other significant work stoppage.

Talent Acquisition and Development

Our success depends upon attracting, retaining and developing a diverse group of talented individuals who possess the skills necessary to support our business objectives, assist in the achievement of our strategic goals, contribute their own unique perspective and skill set and create long-term value for our stockholders. We have implemented purposeful hiring strategies that include opportunities for internal mobility and promotion and an employee referral program, both of which we believe will further strengthen our growing employee base and promote retention at our Company. We have a multifaceted talent development framework that includes functional training, management training and targeted development problems, such as our Six Sigma training that aims to further enhance operational skills in our Government Solutions business unit. We also develop our employees through an annual performance review and assessment process that incorporates a dual-performance rating system and provides each employee with concrete, actionable feedback that will enable them to succeed at our Company.

Compensation and Benefits

Our compensation programs are designed to align the compensation of our employees with the Company’s and individual performance, and to provide a compensation package that will attract, retain, motivate and reward employees to achieve superior results. The structure of our compensation programs balances incentives for both short-term and long-term performance. In addition to cash compensation, we offer employees benefits such as health (medical, dental and vision) insurance, health savings accounts, flexible spending accounts, life insurance, accident insurance, paid time off, paid parental leave and a company-sponsored 401(k) plan, and related benefits for non-U.S. employees. For key leadership positions, we also provide compensation packages that include annual incentive bonuses and long-term equity awards.

11

Employee Engagement

We seek employees who collaborate and value differences, think and act globally, foster an engaging climate, and recognize and develop others. We engage and survey our employee population to gather insight, feedback, and data about employees’ engagement, workplace experiences, and manager effectiveness. Survey results inform and support corporate, business unit, department, and team action plans, with the goal of enhancing workplace satisfaction and overall employee well-being and effectiveness.

Corporate Information

We were originally incorporated in Delaware on August 15, 2016, under the name “Gores Holdings II, Inc.” (“Gores”) as a special purpose acquisition company. On January 19, 2017, Gores consummated its initial public offering (the “IPO”), following which its shares began trading on Nasdaq. On June 21, 2018, Gores entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Greenlight Holding II Corporation, PE Greenlight Holdings, LLC (the “Platinum Stockholder”), AM Merger Sub I, Inc., a direct, wholly owned subsidiary of Gores, and AM Merger Sub II, LLC, a direct, wholly owned subsidiary of Gores. On October 17, 2018, we consummated the transactions contemplated by the Merger Agreement (the “Business Combination”) and we changed our name to “Verra Mobility Corporation.”

Our principal executive office is located at 1150 North Alma School Road, Mesa, AZ 85201. Our telephone number is (480) 443-7000. Our website address is www.verramobility.com. The information on, or accessible through, our website does not constitute part of, and is not incorporated into, this Annual Report.

The trade names, trademarks, and service marks appearing in this Annual Report include registered marks and marks in which we claim common law rights, such as Verra Mobility and the Verra Mobility logo, all of which are our intellectual property. This Annual Report contains additional trade names, trademarks, and service marks of other companies that are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us, by these companies. We have omitted the ® and ™ designations, as applicable, for the trademarks used in this Annual Report.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the SEC. We are subject to the informational requirements of the Exchange Act, and we file or furnish reports, proxy statements and other information with the SEC. Such reports and other information we file with the SEC are available free of charge at http://ir.verramobility.com/financial-information/sec-filings when such reports become available on the SEC’s website. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. We periodically provide other information for investors on our corporate website, www.verramobility.com, and our investor relations website, ir.verramobility.com. This includes press releases and other information about financial performance, information on corporate governance and details related to our annual meeting of stockholders. The information contained on the websites referenced in this Annual Report is not incorporated by reference into this filing. Further, our references to website URLs are intended to be inactive textual references only.

Item 1A. Risk Factors

Risk Factor Summary

Investing in our common stock involves a high degree of risk. In addition to the other information set forth in this Annual Report, you should carefully consider the following factors, which could materially affect our business, financial condition and results of operations in future periods. The risks described below are not the only risks we face. Additional risks not currently known to us may adversely affect our business, financial condition or results of operations in future periods.

Risks Related to Our Customers, Industry and Competition

•Our Commercial Services and Government Solutions segments have customer concentration that could

12

have a material adverse effect on our business.

•Our government contracts are subject to unique risks and uncertainties, including termination rights, delays in payment, audits and investigations, any of which could have a material adverse effect on our business.

•Any decreases in the prevalence or political acceptance of, or an increase in governmental restrictions regarding, automated and other similar methods of photo enforcement, the use of third-party tolling service providers, the ability to charge service or other fees to customers for services provided, could have a material adverse effect on our business.

Risks Related to Our Acquisitions

•Our inability to successfully implement our acquisition strategy could have a material adverse effect on our business.

Risks Related to Data Privacy and Cybersecurity

•A failure in or breach of our networks or systems, including as a result of cyber-attacks, could have a material adverse effect on our business.

Risks Related to our International Operations

•Our international operations expose us to additional risks, and failure to manage those risks could have a material adverse effect on our business.

Risks Related to Our Intellectual Property

•Failure to acquire necessary intellectual property or adequately protect our intellectual property could have a material adverse effect on our business.

Risks Related to Our Indebtedness

•Our substantial level of indebtedness could cause our business to suffer and incurring additional debt could intensify debt-related risks.

Risks Related to Our Vendors

•Our reliance on specialized third-party providers could have a material adverse effect on our business.

Due to the risk factors discussed below, as well as other factors affecting our business, operating results, financial condition, financial performance or prospects, our past financial performance should not be considered to be a reliable indicator of our future performance, and investors should not use historical trends to anticipate results or trends in future periods.

Risks Related to Our Customers, Industry and Competition

Our Commercial Services and Government Solutions segments have customer concentration that could have a material adverse effect on our business.

Our business experiences customer concentration from time to time. For example, our Commercial Services segment is dependent on certain key customers, including those in the RAC industry, such as Avis Budget Group, Inc., Enterprise Holdings, Inc. and The Hertz Corporation. The health of the RAC industry is impacted by a variety of factors, including seasonality, increases in energy prices, general international, national and local economic conditions and cycles, as well as other factors affecting travel levels, such as military conflicts, terrorist incidents, natural disasters and epidemic diseases.

We also experience customer concentration in our Government Solutions segment. The New York City Department of Transportation (“NYCDOT”) represented approximately 19.5% of our total revenues during fiscal 2022, and our contract with NYCDOT, like many other contracts, is subject to unique risks and uncertainties, including termination rights, delays in payment and audits and investigations, any of which could have a material adverse effect on our business. In the future, a small number of customers in our Government Solutions segment may continue 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.

Our government contracts are subject to unique risks and uncertainties, including termination rights, delays in payment, audits and investigations, any of which could have a material adverse effect on our business.

13

We enter into government contracts from time to time with customers that are subject to various uncertainties, restrictions and regulations, which could result in withholding or delay of payments to us. For example, as of December 31, 2022, NYCDOT had an open receivable balance of $35.6 million, which represented 22% of our accounts receivable, net.

Government entities typically finance projects through appropriated funds. While these projects are often planned and executed as multi-year projects, government entities usually reserve the right to change the scope of or terminate these projects for lack of approved funding or at their convenience. Changes in government or political developments, including administrative hurdles, budget deficits, shortfalls or uncertainties, government spending reductions or other debt or funding constraints, could result in our government contracts being reduced in price or scope or terminated altogether, as well as limit our ability to win new government work in the future.

Moreover, if a government customer does not follow the requisite procurement or ordinance-specific administrative procedures, the contract may be subject to protest or voidable regardless of whether we bear any responsibility for the error. Our government contracts are subject to underlying laws and regulations related to government contractors, and often include other one-sided, customer-friendly provisions and certifications, including broad indemnification provisions and uncapped exposure or liquidated damages for certain liabilities, which can impose obligations, requirements and liabilities on us that are beyond those associated with a typical commercial arrangement.

In addition, government contracts are generally subject to audits and investigations by government agencies or higher-tier government contractors. If improper or illegal activities or contractual non-compliance are identified, including improper billing or vendor non-compliance, we may be subject to various civil and criminal penalties and administrative sanctions, which may include termination of contracts, forfeiture of profits, suspension of payments, the imposition of fines, penalties and sanctions, and suspensions or debarment from doing business for or on behalf of the government in the future. If penalties or other restrictions are imposed in one jurisdiction, they could also implicate similar provisions of contracts with other government customers in other jurisdictions. Further, the negative publicity related to these penalties, sanctions or findings in government audits or investigations could harm our reputation and hinder our ability to compete for new contracts with government customers and in the private sector. Any of the foregoing or any other reduction in revenue from government customers could have a material adverse effect on our business, financial condition and results of operations.

Any decreases in the prevalence or political acceptance of, or an increase in governmental restrictions regarding, automated and other similar methods of photo enforcement, the use of third-party tolling service providers or the ability to charge service or other fees to customers for services provided, could have a material adverse effect on our business.

Our Government Solutions segment provides automated safety solutions to national, state and local government agencies, generating revenues through automated photo enforcement of red-light, school bus, speed limit and bus lane laws. We sometimes make significant capital and other investments to attract and retain these contracts, such as the cost of purchasing information technology equipment, constructing and installing photo enforcement systems and developing and implementing software and labor resources. In 2022, revenues from this segment represented approximately 45% of our total revenues. Therefore, we depend on national, state and local governments authorizing the use of automated photo enforcement and not otherwise materially restricting its use. In states that have enabling legislation, if that legislation is amended, not renewed or is otherwise repealed, use of automated enforcement technology can be suspended until new legislation is passed. For example, in 2022, a North Carolina court of appeals issued a ruling limiting the ability of local authorities to make certain decisions with respect to funding automated enforcement programs, impacting the viability of automated enforcement in impacted jurisdictions.

Ballot initiatives, referendums, opinions of attorneys general and legal challenges can also be used to restrict the use of automated enforcement or to impose additional licensing requirements on its use. For example, the Attorneys General in the states of Arizona, Tennessee and Virginia have issued opinions that had the effect of limiting the use of these enforcement technologies or impacting the manner in which photo enforcement programs operate. Usage may also be affected if there is an unfavorable shift in political support for, or public sentiment towards, automated enforcement, or as a result of one or more scandals related to its use.

Similarly, our Commercial Services business may be materially impacted if there is an unfavorable shift in political support for or public sentiment towards tolling or its use is materially restricted or limited, including through the imposition of limits on the fees RAC companies can charge their customers for tolling or violation processing services. Any material restriction or limitation on the use of automated enforcement or material reduction in its use in the markets we serve, or any similar changes with respect to tolling, could have a material adverse effect on our ability to recoup our investments, and negatively impact our business, financial condition and results of operations. Further,

14

our relationships and commercial account agreements with tolling authorities, issuing authorities, motor vehicle departments and other governmental agencies significantly enhances and enables our service offerings, and changes in those relationship or agreements could significantly adversely impact our business.

We face intense competition and any failure to keep up with technological developments, changing customer preferences and new laws and policies could have a material adverse effect on our business.

The markets for our solutions are increasingly competitive, rapidly evolving and fragmented, and are subject to changing technology, shifting customer needs and new laws and policies. A number of vendors develop and market products and services that compete to varying extents with our offerings, and we expect this competition to intensify. The rapid rate of technological change in our industry could increase the chances that we will face competition from new products or services designed by companies that we do not currently compete with. Moreover, we face competition from our own customers as they may choose to invest in developing their own internal solutions.

Some of our existing competitors and potential new competitors have longer operating histories, greater name recognition, less debt, more established customer bases and significantly greater financial, technical, research and development, marketing and other resources than we do. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements. In some cases, our competitors may be better positioned to initiate or withstand substantial price competition, and we may have to reduce our pricing to retain existing business or obtain new business. If we are not able to maintain favorable pricing for our solutions, our profit margin and profitability could suffer. In addition, if a prospective customer is currently using a competing solution, the customer may be unwilling to switch to our solution without setup support services or other incentives. Certain existing and new competitors may be better positioned to acquire competitive solutions, develop new solutions, modify existing solutions, effectively negotiate third-party licenses and other strategic relationships, and take advantage of acquisition or other similar expansion opportunities. Any failure to achieve our target pricing levels, maintain existing customer relationships, generate additional customer wins or otherwise successfully compete would have a material adverse effect on our business, financial condition and results of operations.

Our new products and services and changes to existing products and services may not succeed.

Our ability to retain, increase and engage our customer base and to increase our revenue depends, in large part, on our ability to continue to evolve existing solutions and to create successful new solutions. We may introduce significant changes to our existing solutions or acquire or introduce new and unproven products and services, including using technologies or entering markets or industries in which we have little or no experience. For example, as Government Solutions customers increase their requirements related to data security, privacy and IT architecture, we may be unable to develop new solutions to keep up with increasing requirements. The failure of any new or enhanced solution to achieve customer adoption or our failure to otherwise successfully monetize our development efforts could have a material adverse effect on our business, financial condition and results of operations. Further, changes to the hardware solutions we offer to our government customers may require certification by a government agency, and failure to achieve such certification may result in an inability to operate photo enforcement systems in a particular jurisdiction. Any failure to evolve existing solutions or create new successful solutions could have a material adverse effect on our business, financial condition and results of operations.

15

We regularly pursue contracts and contract renewals, particularly in our Government Solutions and Parking Solutions segments, that require competitive bidding, which can involve substantial costs and could have a material adverse effect on our business.

Many of the government contracts and renewals for which we bid, particularly those for certain larger government customers, are extremely complex and require the investment for significant resources in order to prepare accurate bids and proposals. Further, a significant percentage of new customer growth opportunities in our Government Solutions, Parking Solutions and EPC businesses are only accessible through competitive bidding. Competitive bidding imposes substantial costs and presents several risks, including significant time and effort and the commitment of resources, regardless of whether the job is ultimately won. We may also be unable to meet the requirements of a solicitation or may have to incur substantial costs to be able to do so. These and other unanticipated costs related to the competitive bidding process, including advancing or defending bid protests, and any failure to win renewals or new customer accounts through the competitive bidding process, could have a material adverse effect on our business, financial condition and results of operations.

Our business and results of operations may be adversely affected by COVID-19, including emerging variant strains, and its impact on our customers.

The government and private business actions taken to curtail the spread of COVID-19 continue to have significant negative effects globally. Since the outbreak of COVID-19, logistics, manufacturing, and supply chain have been significantly impacted, resulting in global supply shortages. Our RAC and FMC customers have been, at times, severely impacted by COVID-19 and related “stay-at-home orders” and travel restrictions. The extent to which the COVID-19 pandemic may impact our future operational and financial performance remains uncertain and will depend on many factors outside our control, including the timing, extent, trajectory and duration of the pandemic, the emergence of new variants and the impact on our customers, partners, employees and suppliers.

Any new or additional measures implemented to contain COVID-19 could have a significant negative effect on our business, financial condition, results of operations, cash flows and liquidity position, along with heightening many of the other risks described herein.
 

Risks Related to Our Acquisitions

Our inability to successfully implement our acquisition strategy could have a material adverse effect on our business.

We have grown in large part as a result of our acquisitions, and we anticipate continuing to grow in this manner. Although we expect to regularly consider additional strategic transactions in the future, we may not identify suitable opportunities or, if we do identify prospects, it may not be possible to consummate a transaction on acceptable terms. Antitrust or other competition laws may also limit our ability to acquire or work collaboratively with certain businesses or to fully realize the benefits of a prospective or completed acquisition. Furthermore, a significant change in our business or the economy, an unexpected decrease in our cash flows or any restrictions imposed by our indebtedness may limit our ability to obtain the necessary capital or otherwise impede our ability to complete a transaction. Regularly considering strategic transactions can also divert management’s attention and lead to significant due diligence and other expenses regardless of whether we pursue or consummate any transaction. Failure to identify suitable transaction partners and to consummate transactions on acceptable terms, as well as the commitment of time and resources in connection with such transactions, could have a material adverse effect on our business, financial condition and results of operations.

The inability to successfully integrate our recent or future acquisitions could have a material adverse effect on our business.

We have integrated, and may in the future integrate, certain acquired businesses into our existing operations, which requires significant time and exposes us to significant risks and additional costs. Further, we may have difficulty integrating the operations, systems, controls, procedures or products of such acquired businesses and may not be able to do so in a timely, efficient and cost-effective manner.

These difficulties could include:

16

•combining management teams, strategies and philosophies;

•merging or linking different accounting and financial reporting systems and systems of internal controls;

•assimilating personnel, human resources and other administrative departments and potentially contrasting corporate cultures;

•merging computer, technology and other information networks and systems;

•disrupting our relationship with or losing key customers, suppliers or personnel; and

•interference with, or loss of momentum in, our ongoing business or that of the acquired business.

Any integration-related issues could cause significant disruption to our business, divert the attention of management and lead to substantial additional costs and delays. For example, between February 2022 and April 2022, our Audit Committee devoted significant time and resources into an accounting investigation of Redflex Holdings Limited, a recently acquired subsidiary, and we were unable to timely file our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Our inability to successfully integrate acquired businesses could have a material adverse effect on our business, financial condition and results of operations.

Any failure to realize the anticipated benefits of an acquisition, including unanticipated expenses and liabilities related to acquisitions, could have a material adverse effect on our business.

We pursue each acquisition with the expectation that the transaction will result in various benefits, including growth opportunities and synergies from increased efficiencies. However, we may not realize some or all of the anticipated benefits of our acquisitions within our anticipated timeframes or at all. Furthermore, we may experience increased competition that limits our ability to expand our business, we may not be able to capitalize on expected business opportunities, and general industry and business conditions may deteriorate. Acquisitions also expose us to significant risks and costs, and business and operational overlaps may lead to hidden costs. These costs can include unforeseen pre-acquisition liabilities, the impairment of customer relationships or acquired assets such as goodwill, or exposure to oversight, operational and business control risks associated with a newly acquired business. We may also incur costs and inefficiencies to the extent an acquisition expands the industries, markets or geographies in which we operate due to our limited exposure to and experience in a given industry, market or region. Significant acquisitions may also require us to incur additional debt to finance the transactions, which could limit our flexibility in using our cash flow from operations for other purposes. Acquisitions often involve post-transaction disputes with the counterparty regarding a number of matters, including disagreements over the amount of a purchase price or other working capital adjustment or disputes regarding whether certain liabilities are covered by the indemnification provisions of the transaction agreement. We may underestimate the level of certain costs or the exposure we may face as a result of acquired liabilities. If any of these or other factors limit our ability to achieve the anticipated benefits of a transaction, or we encounter other unexpected transaction-related costs and liabilities, our business, financial condition and results of operations could be materially and adversely affected.

Risks Related to Data Privacy and Cybersecurity

A failure in or breach of our networks or systems, including as a result of cyber-attacks, could have a material adverse effect on our business.

We act as a trusted business partner in both front office and back office platforms, interacting with our customers and other third parties. Our customers include large, multinational corporations and government agencies who depend upon our operational efficiency, non-interruption of service, and accuracy and security of information. We receive, process, transmit and store substantial volumes of information relating to identifiable individuals, both in our role as a back-end or direct-to-consumer service provider and as an employer, and receive, process and implement financial transactions, and disburse funds, which requires us to receive debit and credit card information. We also use third-party providers such as subcontractors, software vendors, utility providers and network providers, upon whom we rely to offer our products, services and solutions. As a result of these and other aspects of our business, the integrity, security and accuracy of our systems and information technology, and that of the third parties with which we interact, including our customers and other government agencies with which we work, are extremely important.

17

Our cybersecurity and processing systems, as well as those of the third parties with which we interact, may be damaged, disrupted or otherwise breached for a number of reasons, including power outages, computer and telecommunication failures, computer viruses, malware or other destructive software, internal design, manual or usage errors, cyber-attacks, terrorism, workplace violence or wrongdoing, catastrophic events, natural disasters and severe weather conditions. Our visibility and role as a processor of transactions containing personally identifiable information may also put us at a greater risk of being targeted by hackers. In the normal course of our business, we have been the target of malicious cyber-attack attempts.

In addition, numerous and evolving cybersecurity threats, including advanced and persistent cyber-attacks, phishing and social engineering schemes could compromise the confidentiality, availability and integrity of data in our systems as well as those of the third parties with which we interact. The security measures and procedures we and the third parties with which we interact have in place to protect sensitive consumer data and other information may not be successful or sufficient to counter all data breaches, cyber-attacks, or system failures. Further, employee error or malfeasance, faulty password management or other irregularities may result in a defeat of security measures or a system breach. Although we devote significant resources to our cybersecurity programs and have implemented security measures to protect our systems and data, and to prevent, detect and respond to data security incidents, in each case that we believe are reasonable and appropriate, these efforts, and the efforts of third parties with which we interact, may not prevent these or other threats.

Moreover, because the techniques used to obtain unauthorized access, or to disable or degrade systems change frequently, have become increasingly more complex and sophisticated, and may be difficult to detect for periods of time, we and the third parties with which we interact may not anticipate these acts or respond adequately or timely. As these threats continue to evolve and increase, we may be required to devote significant additional resources in order to modify and enhance our security controls and to identify and remediate any security vulnerabilities or diligencing those of third parties.

If we are sued in connection with any data security breach or system failure, we could be involved in protracted litigation. In addition, a breach could lead to unfavorable publicity and significant damage to our brand, the loss of existing and potential customers, allegations by customers that we have not performed or breached our contractual obligations, or decreased use and acceptance of our solutions. A breach or failure may also subject us to additional regulations or governmental or regulatory scrutiny, which could result in significant compliance costs, fines or enforcement actions, or potential restrictions imposed by regulators on our ability to operate our business. A security breach would also likely require us to devote significant management and other resources to address the problems created by the security breach. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

We are subject to laws and regulations of the United States and foreign jurisdictions relating to personal information, privacy and data security, and failure to comply with these laws and regulations, whether or not inadvertent, could have a material adverse effect on our business.

Personal information is used both as part of our business and in our role as an employer. In addition, as part of our Government Solutions, Commercial Services and Parking Solutions businesses, we process other data which may be considered personal information or sensitive personal information in certain jurisdictions, such as photographs and video recordings. As a result, we are subject to various laws and regulations regarding personal information, privacy and data security, including those promulgated by the United States federal government and its agencies, and state, local and foreign governments, agencies, and public authorities. Our personal information handling also is subject to contractual obligations and industry standards.

18

Laws, regulations and industry standards relating to privacy are rapidly evolving, can be subject to significant change and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions. These laws and regulations may also be subject to new or different interpretations. For example, in June 2018, California enacted the CCPA, which took effect on January 1, 2020. The CCPA creates several new obligations for companies which process personal information. It also gives California residents expanded rights to access, delete and obtain a copy of their personal information; opt out of certain personal information sharing and receive detailed information about how their personal data is processed. The law provides for civil penalties against companies that fail to comply. The California Attorney General’s regulations governing compliance with the CCPA went into effect in August 2020, with additional amendments effective as of March 2021. A violation of these regulations constitutes a violation of the CCPA. A new California privacy law, the California Privacy Rights Act (“CPRA”), creates obligations relating to personal information that began on January 1, 2022, and enforcement beginning July 1, 2023. It substantially amends and amplifies the requirements of the CCPA, as well as creates a new agency responsible for enforcing California’s privacy laws. Unlike the CCPA, the CPRA applies to employee personal information in addition to consumer personal information. In 2021, Virginia, Colorado, Connecticut and Utah also enacted comprehensive state privacy laws, which become operative in 2023. Additionally, dozens of other state legislatures have introduced privacy bills, and Congress is considering several privacy bills at the federal level.

Foreign laws concerning personal information, privacy and data security may be more restrictive and burdensome than those of the United States. Given that data is highly mobile and transferable, many data protection and privacy laws of foreign nations seek to have wide extraterritorial jurisdiction over conduct occurring outside geographical boundaries of the relevant jurisdiction. For example, on May 25, 2018, the E.U. General Data Protection Regulation GDPR replaced the 1995 Data Protection Directive. The GDPR extends the scope of E.U. data protection law to non-E.U. companies processing data of E.U. residents when certain conditions are satisfied. The GDPR contains numerous, more stringent requirements and changes from prior E.U. law, including more robust privacy and compliance obligations for both companies and their service providers, greater rights for individuals, heavier documentation requirements for data protection compliance programs and restrictions on transfers of personal data to non-E.U. countries. Further, our customers, through contractual requirements, could require us to comply with certain of these stringent requirements regardless of whether our business is actually subject to the GDPR.

The costs are high and deadlines are short for compliance with these privacy-related laws, regulations, contractual requirements and industry standards, each of which may limit our ability to compete for new business, do business with certain government agencies or continue to access certain data and may limit the use or adoption of our smart mobility technology solutions and services, reduce overall demand for our solutions and services, or slow the pace at which we generate revenue. Moreover, if our policies, procedures or measures relating to these issues fail to comply, or regulators assert we have failed to comply, with applicable laws, regulations or industry standards, we may be subject to governmental enforcement actions, litigation, regulatory investigations, fines, penalties and negative publicity, and our application providers, customers and partners may lose trust in or stop doing business with us entirely. We expect that there will continue to be new proposed laws, regulations and industry standards concerning personal information, privacy and data retention in the United States, the E.U. and other jurisdictions, and we cannot yet determine the impact such future laws, regulations and industry standards may have on our business. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

We are subject to domestic and foreign laws relating to processing certain financial transactions, including debit or credit card transactions, and failure to comply with those laws, even if inadvertent, could have a material adverse effect on our business.

We process, support and execute financial transactions as part of our business and disburse funds on behalf of certain of our customers. This activity includes receiving debit and credit card information, processing payments for and due to our customers and disbursing funds on payment or debit cards to payees of our customers. As a result, we may be subject to numerous U.S. federal and state and foreign jurisdiction laws and regulations, including the Electronic Fund Transfer Act, the Currency and Foreign Transactions Reporting Act of 1970 (commonly known as the Bank Secrecy Act) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”).

19

We have implemented policies and procedures to preserve and protect credit card and other payment data against loss, corruption, misappropriation caused by systems failures, unauthorized access or misuse. Notwithstanding these policies and procedures, we could be subject to liability claims by individuals and customers whose data resides in our databases for the misuse of that information. If we fail to meet appropriate compliance levels, this could negatively impact our ability to utilize credit cards as a method of payment, or collect and store credit card information, which could disrupt our business. Failure to comply with these laws may subject us to, among other things, additional costs or changes to our business practices, liability for monetary damages, fines or criminal prosecution, unfavorable publicity, restrictions on our ability to process and support financial transactions and allegations by customers that we have not performed our contractual obligations, any of which could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Human Capital Management

We depend on the services of key executives and any inability to attract and retain key management personnel could have a material adverse effect on our business.

Our future success depends upon the continued services of our executive officers, including our Chief Executive Officer and Chief Financial Officer, who have critical experience and relationships that we rely on to implement our business plan and growth strategy. 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 should any members of the management team leave or be terminated 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 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.

A failure to attract and retain necessary skilled personnel and qualified subcontractors could have a material adverse effect on our business.

Our business depends on highly skilled technical, managerial, engineering, sales, marketing and customer support personnel and qualified and competent subcontractors. Competition for these personnel is intense. Any failure to attract, hire, assimilate in a timely manner and retain and motivate key qualified personnel, particularly software development, product development, analytics and other technical personnel, or inability to contract with qualified, competent subcontractors, could impair our success. Additionally, certain portions of our Government Solutions operations are dependent on employees and subcontractors who are subject to a collective bargaining agreement. When the collective bargaining agreement becomes subject to renegotiation or if we face union organizing drives, any disagreement between us and the union on important issues may lead to a strike, work slowdown or other job actions in one or more locations we serve. A strike, work slowdown or other job action could disrupt our services, resulting in reduced revenues or contract cancellations. State or local law in some jurisdictions requires that subcontractors for our Government Solutions segment are certified by the jurisdiction, and the failure on the part of our subcontractors to obtain and maintain such certification could impact their ability to perform services for us. Further, our acquisition activity could increase the challenge of retaining our key employees and subcontractors and those of the acquired businesses. The loss of any key technical employee or the termination of a key subcontractor relationship, and any inability to identify suitable replacements or offer reasonable terms to these candidates, could have a material adverse effect on our business, financial condition and results of operations.

20

Risks Related to our International Operations

Our operations in international markets expose us to additional risks, and failure to manage those risks could have a material adverse effect on our business.

We have subsidiaries in various international markets around the world, including in the United Kingdom, the Netherlands, France, Ireland, Spain, Australia, Canada and Hungary. The success of our business depends, in part, on our ability to successfully manage these foreign operations. Our international operations subject us to risks that could increase expenses, restrict our ability to operate, result in lost revenues or otherwise materially and adversely affect our business, including:

•political, social, and economic instability, including European sovereign debt issues and tightening of government budgets;

•wars, civil unrest, acts of terrorism and other conflicts;

•increased complexity and costs of managing or overseeing foreign operations, including adapting and localizing our services to specific regions and countries and relying on different third-party service providers;

•complying with tariffs, trade restrictions, and trade agreements and any changes thereto;

•foreign exchange and other restrictions and limitations on the transfer or repatriation of funds;

•adverse tax consequences;

•fluctuations in currency exchange rates;

•complying with varying legal and regulatory environments in multiple foreign jurisdictions, including with respect to data and consumer privacy and payment processing, labor matters and VAT, and unexpected changes in these laws, regulatory requirements, and the enforcement thereof; and

•limited protection of our intellectual property and other assets as compared to the laws of the United States.

We have limited or no control over these and other factors related to international operations and our strategies to address these risks may not correctly anticipate any problems that arise or be successful in expanding our solutions from the United States into new markets. Any failure to successfully manage these and other similar risks could have a material adverse effect on our business, financial condition and results of operations.

Our growth strategy is, in part, dependent on successfully implementing our international expansion strategy.

Our growth strategy includes expanding our global footprint, which may involve moving into regions and countries beyond those in which we currently operate. In order to achieve widespread acceptance in new markets we may enter, we may need to develop new products and services or tailor our existing products and services to that market’s unique customs, cultures and standards. Management of these and any future international subsidiaries may divert our resources and require significant attention from management. In addition to the risks inherent in conducting international business, expanding internationally with new and existing customers poses additional risks, including:

•lack of acceptance of our products and services;

•tax issues, including administration of value-added tax, restrictions on repatriating earnings, and with respect to our corporate operating structure and intercompany arrangements;

•our ability to adapt our marketing and selling efforts to different cultures and customers;

•a different competitive environment, including a number of smaller competitors and a more fragmented business model, as well as competition from other market participants;

•our ability to obtain and protect intellectual property rights to operate successfully in each territory due to pre-existing third-party intellectual property rights; and

•an unfamiliar regulatory environment, including different local, provincial and national regulations.

If we are unable to effectively manage these risks, our relationships with our existing and prospective customers, strategic partners and employees and our operations outside the United States may be adversely affected.

21

In many cases, we will have limited or no experience in a particular region or country where we intend to launch operations. Moreover, learning the customs and cultures, particularly with respect to consumer preferences, differing technology standards and language barriers, is a difficult task. Our failure to do so effectively could slow our growth in those regions or countries. In many of these markets, long-standing relationships between potential customers and their local partners and protective regulations, including local content requirements and approvals, and disparate networks and systems used by each country, will create barriers to entry. Difficulties in foreign financial markets and economies and of foreign financial institutions, particularly in emerging markets, could also adversely affect demand in the affected areas. For this strategy to be successful, we must generate sufficient revenues and margins from the new markets to offset the expense of the expansion. Moreover, as the scale of our international operations increases, we will be more susceptible to the general risks related to our existing international operations discussed above. If we are unable to further expand internationally or if we are unable to effectively and efficiently manage the complexity of our expanded operations and compete in these new regions and countries, our business, financial condition and results of operations could be adversely affected.

Failure to comply with anticorruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act and similar laws associated with our activities outside of the United States, could have a material adverse effect on our business.

Our operations subject us to anticorruption and other similar laws and regulations of multiple jurisdictions, both within the United States and internationally, which are often evolving, including the Foreign Corrupt Practices Act (the “FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the Patriot Act, and comparable foreign anti-bribery and anti-money laundering laws and regulations, including the United Kingdom Bribery Act of 2010. Our Government Solutions business is subject to a number of international, federal, state and local laws and regulations regarding similar matters. These laws and regulations prohibit companies and their employees and third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper payments or other benefits to government officials, political parties and private-sector recipients for the purpose of obtaining or retaining business, directing business to any person or securing any advantage.

We use various third parties to conduct our business, both domestically and abroad, and we can be held liable for the corrupt or illegal activities of our employees, representatives, contractors or subcontractors, partners, and agents, those of the third parties with which we do business or those of any businesses we acquire, even if we do not explicitly authorize such activities or if they occurred prior to our acquisition of the relevant business. Safeguards we implement to discourage these practices may prove to be ineffective and any internal investigations may not uncover any such practices that may exist. Violations of the FCPA or other applicable anti-bribery, anti-corruption, and anti-money laundering laws by us or any of these third parties can result in severe criminal or civil sanctions, or other liabilities or proceedings against us, including class action lawsuits, whistleblower complaints, enforcement actions by the SEC, Department of Justice, and U.S. state and local and foreign regulators, adverse media coverage, non-responsibility determinations by procuring agencies, and suspension or debarment from government contracts, any of which could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Intellectual Property

Failure to acquire necessary intellectual property or adequately protect our intellectual property could have a material adverse effect on our business.

Our success depends, in part, on our ability to protect and defend our intellectual property against infringement, misappropriation and dilution. To protect our intellectual property rights, we rely on a combination of patent, trademark, copyright, trade secret and unfair competition laws of the United States and other countries, as well as contract provisions. We have registered certain patents and trademarks and have applications pending in the United States and foreign jurisdictions for some inventions and trademarks, including the Verra Mobility word mark and logo, for which some registrations have been granted and some applications are pending. However, not all of the trademarks and inventions we currently use have been registered in all of the countries in which we do business, and they may never be registered in all of those countries, and the applications we submit for these protections may not be granted. While we make efforts to acquire rights to intellectual property necessary for our operations, these measures may not adequately protect our rights in any given case, particularly in those countries where the laws do not protect proprietary rights as fully as in the United States.

If we fail to acquire necessary intellectual property rights or adequately protect or assert our intellectual property rights, competitors may manufacture and market similar products and services, or dilute our brands, which could adversely affect our market share. It may be possible for third parties to reverse engineer, otherwise obtain, copy, and use software or information that we regard as proprietary. In addition, our competitors may avoid application of our existing or future intellectual property rights. Further, patent rights, copyrights and contractual provisions may not prevent our competitors from developing, using or selling products or services that are similar to or address the same

22

market as, our products and services. Failure to obtain registrations for the Verra Mobility word mark or logo may have a significant adverse impact on our brand. Moreover, some of our trademarks and services are descriptive or include descriptive elements, which may make it difficult to enforce our rights or prevent others from adopting and using similar marks. Competitive products and services could reduce the market value of our brands, products and services, inhibit attracting new customers or maintaining existing customers, lower our profits, and could have a material adverse effect on our business, financial condition and results of operations.

Our measures to monitor and protect our intellectual property may not be adequate to maintain or enforce our patents, trademarks or other intellectual property rights.

Despite our efforts to monitor and protect our intellectual property, we may not be able to maintain or enforce our patents, trademarks or other intellectual property rights. Unauthorized third parties may use our trademarks and service marks, or marks that are similar thereto, to impinge on our goodwill, cause consumer confusion or dilute our rights in the marks. We are aware of products, software and marks similar to our intellectual property being used by other persons. Although we believe that such uses will not adversely affect us, further or currently unknown unauthorized uses or other infringement of our trademarks or service marks could diminish the value of our intellectual property and may adversely affect our business. Even where we have effectively secured protection for our intellectual property, our competitors may challenge, infringe, misappropriate or dilute our intellectual property and our employees, consultants, contractors, customers and suppliers may breach their contractual obligations not to reveal or use our confidential information, including trade secrets. Additionally, defending or enforcing our intellectual property rights and agreements, and seeking an injunction or compensation for infringements or misappropriations, could result in expending significant resources and diverting management attention, which in turn may have a material adverse effect on our business, financial condition and results of operations.

We have been and may become subject to third-party infringement claims or challenges to the validity of our intellectual property that could have a material adverse effect on our business.

We have faced, and may in the future face, claims for infringement, misappropriation or other violations of intellectual property rights from intellectual property owners in areas where we operate or intend to operate, including in foreign jurisdictions. Such claims may or may not be unfounded. Regardless of whether such claims have merit, our image, brands, competitive position and ability to expand our operations into other jurisdictions may be harmed and we may incur significant costs related to defense or settlement. If such claims were decided against us or a third party we indemnify pursuant to license terms, we could be required to pay damages, develop or adopt non-infringing products or services, or acquire a license to the intellectual property that is the subject of the asserted claim, which license may not be available on acceptable terms or at all.

Defending or settling claims would require the expenditure of additional capital, and negative publicity could arise, even if the matter was ultimately decided in our favor. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Indebtedness

Our substantial level of indebtedness could cause our business to suffer and incurring additional debt could intensify debt-related risks.

We have a substantial amount of debt, including approximately $886 million outstanding under our first lien term loan facility as of December 31, 2022. Additionally, pursuant to an indenture, VM Consolidated, Inc. issued an aggregate principal amount of $350 million in Senior Unsecured Notes (the “Senior Notes”) due 2029. We may also incur substantial additional debt in the future to, among other things, finance our acquisition strategy. We have the option to increase commitments under our revolving credit agreement by up to $50.0 million, all of which would be secured. We also have the ability to draw an unlimited amount from our first lien term loan facility, subject to the satisfaction of a maximum total net leverage ratio or minimum fixed charge coverage ratio, on a pro forma basis, all of which will be secured. Our substantial debt could have important consequences, any of which could be intensified if new debt is added to our current debt levels. For example, it could:

•increase our vulnerability to adverse economic and industry conditions;

•limit our ability to obtain additional financing for future working capital, capital expenditures, strategic acquisitions and other general corporate requirements;

•expose us to interest rate fluctuations because the interest rate on certain of our debt is variable;

•require us to dedicate a substantial portion of our cash flow from operations to payments on our debt,

23

thereby reducing the availability of our cash flow for operations and other purposes;

•make it more difficult for us to satisfy our general business obligations, including our obligations to our lenders, resulting in possible defaults on and acceleration of such indebtedness;

•limit our ability to refinance indebtedness or increase the associated costs;

•require us to sell assets to reduce debt or influence our decision about whether to do so;

•limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate or prevent us from carrying out capital spending that is necessary or important to our growth strategy and efforts to improve operating margins; and

•place us at a competitive disadvantage compared to any competitors that have less debt or comparable debt at more favorable interest rates and that, as a result, may be better positioned to withstand economic downturns.

Restrictive covenants in the agreements governing our indebtedness could restrict our operating flexibility.

The agreements governing our indebtedness limit our ability to take certain actions. These restrictions may limit our ability to operate our businesses, prohibit or limit our ability to enhance our operations or take advantage of potential business opportunities as they arise and cause us to take actions that are not favorable to stockholders.

The agreements governing our indebtedness restrict, among other things and subject to certain exceptions, our and our restricted subsidiaries’ ability to:

•incur additional indebtedness;

•pay dividends or other payments on capital stock;

•guarantee other obligations;

•grant liens on assets;

•make loans, acquisitions or other investments;

•transfer or dispose of assets;

•make optional payments or modify certain debt instruments;

•engage in transactions with affiliates;

•amend organizational documents;

•engage in mergers or consolidations;

•enter into arrangements that restrict the ability to pay dividends;

•engage in business activities that are materially different from existing business activities;

•change the nature of the business we conduct; and

•designate subsidiaries as unrestricted subsidiaries.

Under our first lien term loan facility, we could be required to make periodic prepayments based on excess cash flow (as defined by the first lien term loan agreement) thereby limiting the amount of cash flow that can be reinvested in our business. For example, under our revolving credit facility, if availability goes below a certain threshold, we will be required to comply with a minimum “consolidated fixed charge coverage ratio” financial covenant as calculated therein. Moreover, if availability falls below a certain threshold for a specified number of business days, we could be required to remit our cash funds to a dominion account maintained by the administrative agent to the revolving credit facility, which would require daily review and approval of operating disbursements by the administrative agent.

Our ability to comply with the covenants and restrictions contained in agreements governing our indebtedness may be affected by economic conditions and by financial, market and competitive factors, many of which are beyond our control. Our ability to comply with these covenants in future periods will also depend substantially on the pricing and sales volume of our products, our success at implementing cost reduction initiatives and our ability to successfully implement our overall business strategy. The breach of any of these covenants or restrictions could result in a default under one or more of the agreements governing our indebtedness that would permit the applicable lenders to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. In that case, we may be unable to borrow under our revolving credit agreement or otherwise, may not be able to repay the amounts

24

due under the agreements governing our indebtedness, and may not be able to make cash available by dividend, debt repayment or otherwise. In addition, our lenders could proceed against the collateral securing that indebtedness. Any of the foregoing could have serious consequences to our financial position, results of operations or cash flows and could cause us to become bankrupt or insolvent.

The agreements governing our indebtedness contain cross default or cross acceleration provisions that may cause all of the debt issued under those instruments to become immediately due and payable because of a default under an unrelated debt instrument.

The agreements governing our indebtedness contain numerous covenants and require us, if availability goes below a certain threshold, to comply with a minimum “consolidated fixed charge coverage ratio” financial covenant as calculated in the revolving credit agreement. Our failure to comply with the obligations contained in these agreements or other instruments governing our indebtedness could result in an event of default under the applicable instrument, which could result in the related debt and the debt issued under other instruments (together with accrued and unpaid interest and other fees) becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which funds may not be available to us on favorable terms, on a timely basis or at all. Alternatively, such a default could require us to sell assets and otherwise curtail our operations in order to pay our creditors. These alternative measures could have a material adverse effect on our business, financial position, results of operations or cash flows.

If we do not generate sufficient cash flows, we may not be able to service all of our indebtedness.

To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash, make scheduled payments or to refinance our debt obligations depends on our successful financial and operating performance, which will be affected by a range of economic, competitive and business factors, many of which are outside of our control.

If our cash flow and capital resources are insufficient to fund our debt service obligations or to repay indebtedness when it matures, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets or operations, reducing or delaying capital investments or seeking to raise additional capital. We may not be able to refinance our debt and any refinancing of our debt could be at higher interest rates and may require us to comply with more restrictive covenants that could further restrict our business operations and our ability to make cash available for dividends and distributions and payments on our other debt obligations (if any). Our ability to implement successfully any such alternative financing plans will be dependent on a range of factors, including general economic conditions, the level of activity in mergers and acquisitions and capital markets generally, and the terms of our various debt instruments then in effect. In addition, a significant portion of our outstanding indebtedness is secured by substantially all of our assets including our subsidiaries’ assets, and any successor credit facilities are likely to be secured on a similar basis. As such, our ability to seek additional financing or our ability to make cash available for dividends and distributions and payments on our other debt obligations (if any) could be impaired as a result of such security interests and the agreements governing such security interests. Moreover, as a result of these security interests, the underlying assets would only be available to satisfy claims of our general creditors or holders of our equity securities if we were to become insolvent to the extent the value of such assets exceeded the amount of our indebtedness and other obligations.

Our inability to generate sufficient cash flow to satisfy our debt obligations or to refinance our obligations on commercially reasonable terms could have a material adverse effect on our business, including our financial condition and results of operations.

We may be unable to obtain additional financing to fund operations and growth.

We may require additional financing to fund our operations or growth, whether organic or through acquisitions. Our failure to secure additional financing could have a material adverse effect on our continued development or growth.

Risks Related to Our Class A Common Stock, Warrants, Related Party Transactions and Organizational Documents

25

We are required to pay Lakeside Smart Holdco L.P for a significant portion of the tax benefit relating to pre-Business Combination tax attributes of Verra Mobility.

At the closing of the Business Combination, we entered into the Tax Receivable Agreement with the PE Greenlight Holdings, LLC (the “Platinum Stockholder”) and the stockholder representative (as may be amended from time to time, the “Tax Receivable Agreement”), which was subsequently assigned by the Platinum Stockholder to Lakeside Smart Holdco L.P. (“Lakeside”), as successor in interest to the Platinum Stockholder, on August 3, 2022. The Tax Receivable Agreement provides that we pay Lakeside 50% of the net cash savings, if any, in U.S. federal, state and local income tax that we actually realize (or are deemed to realize in certain circumstances) in periods after the closing of the Business Combination as a result of the increase in the tax basis of the intangible assets of Highway Toll Administration, LLC (“HTA”) resulting from the acquisition of HTA by Verra Mobility prior to the Business Combination. We will generally retain the benefit of the remaining 50% of these cash savings.

Under certain circumstances (including an election by us, a material breach of our obligations under the Tax Receivable Agreement, or certain transactions constituting a change in control or divestiture of the HTA assets under the Tax Receivable Agreement), payments under the Tax Receivable Agreement may accelerate, and we may be required to make such payments in a lump sum based on certain valuation assumptions, including that we and our subsidiaries will generate sufficient taxable income to fully utilize the applicable deductions generated by the intangible assets of HTA.

We cannot guarantee that our stock repurchase program will enhance long-term shareholder value. Stock 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 on August 16, 2022, which (among other provisions) provides a 1% excise tax on net stock repurchases. This provision is expected to apply to any stock repurchases initiated after January 1, 2023.

In May 2022, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $125 million of our outstanding shares of Class A Common Stock. We subsequently paid $50.0 million in May 2022 to repurchase outstanding shares of our Class A Common Stock through an ASR, and received an initial delivery of 2,739,726 shares. The final settlement occurred in August 2022, at which time we received 445,086 additional shares. In addition, during the second and third quarters, we paid $6.9 million and repurchased 445,791 shares of our Class A Common Stock through open market transactions. During the third quarter of 2022, we discontinued open market repurchases and our Board of Directors authorized a second ASR for the remaining availability under the share repurchase program. In August 2022, we paid $68.1 million for the second ASR, and received an initial delivery of 3,300,000 shares of our Class A Common Stock. The final settlement of the ASR resulted in the receipt of 943,361 additional shares. In November 2022, 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 in open market transactions, ASRs or privately negotiated transactions. The Company has not yet repurchased shares under this repurchase program.

The timing, price, and quantity of purchases under the program 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 the program will enhance long-term stockholder value. The share repurchase program could affect the trading price of our common stock and increase volatility. In addition, our repurchases under our share repurchase program have diminished, and could continue to diminish, our cash reserves.

Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

Our certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together, these provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. These provisions include:

•no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

26

•a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board of Directors (our “Board”);

•the requirement that directors may only be removed from the Board for cause;

•the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board;

•a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

•a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by members of our Board or our Chief Executive Officer, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

•the requirement that changes or amendments to certain provisions of our certificate of incorporation or bylaws must be approved by holders of at least two-thirds of our Common Stock; and

•advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.

Our bylaws include a forum selection clause, which may impact the ability of our stockholders to bring actions against us.

Subject to certain limitations, our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery in the State of Delaware will be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring: (a) any derivative action or proceeding brought on our behalf; (b) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees or our stockholders; (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporate Law or our certificate of incorporation or bylaws; or (d) any action asserting a claim governed by the internal affairs doctrine. In addition, our bylaws provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the federal securities laws of the United States against us, our officers, directors, employees or underwriters. These limitations on the forum in which stockholders may initiate action against us could create costs or, inconvenience or otherwise adversely affect our stockholders’ ability to seek legal redress. If a court were to find the forum-selection provisions contained in our bylaws to be unenforceable, we may incur additional costs associated with resolving proceedings in forums other than the Court of Chancery in the State of Delaware and the federal district courts of the United States.

Our only significant asset is our ownership interest in our operating subsidiaries and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Class A Common Stock or satisfy our other financial obligations, including our obligations under the Tax Receivable Agreement.

We have no direct operations and no significant assets other than our ownership interest in our operating subsidiaries. We depend on our operating subsidiaries for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company, to pay any dividends with respect to our Class A Common Stock, and to satisfy our obligations under the Tax Receivable Agreement. The financial condition and operating requirements of our operating subsidiaries may limit our ability to obtain cash from our operating subsidiaries. The earnings from, or other available assets of, our operating subsidiaries may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Common Stock or satisfy our other financial obligations, including our obligations under the Tax Receivable Agreement.

The ability of our operating subsidiaries (other than subsidiaries which have been designated as unrestricted pursuant to our ability to do so in certain limited circumstances) to make distributions, loans and other payments to us for the purposes described above and for any other purpose is governed by the terms of the Debt Agreements and will be subject to the negative covenants set forth therein. Any loans or other extensions of credit will be subject to the investment covenants under the Rollover Credit Agreements. The “Debt Agreements” means, collectively: (i) the

27

Amendment and Restatement Agreement No. 1 to First Lien Term Loan Credit Agreement, dated as of March 26, 2021, among Greenlight Acquisition Corporation, a Delaware corporation; VM Consolidated, Inc. (formerly known as ATS Consolidated, Inc.), a Delaware corporation; American Traffic Solutions, Inc., a Kansas corporation; and Lasercraft, Inc., the subsidiary guarantors party thereto, a Georgia corporation; the lenders party thereto from time to time; and Bank of America, N.A. as Administrative Agent and Collateral Agent; and (ii) the Revolving Credit Agreement, dated as of March 1, 2018, among Greenlight Acquisition Corporation, a Delaware corporation; VM Consolidated, Inc., a Delaware corporation; the other Borrowers (for this purpose only, as defined therein) party thereto from time to time; the lenders party thereto from time to time; and Bank of America, as the administrative agent and the collateral agent; and (iii) the Indenture governing VM Consolidated, Inc.’s 5.50% Senior Notes Due 2029, among VM Consolidated, Inc., Wilmington Trust, National Association, and the Guarantors named therein, dated as of March 26, 2021, in the case of each of the foregoing (i) and (ii), as amended or otherwise modified from time to time.

Our failure to be current in our SEC filings could pose significant risks to our business, each of which could materially and adversely affect our financial condition and results of operations.

Under the Exchange Act, the Company, as reporting company, is required to provide investors on a regular basis with periodic reports that contain important financial and business information. Examples of these reports include the annually filed Form 10-K and the quarterly filed Form 10-Q. The timely and complete submission of periodic reports provides investors with information to help them make informed investment decisions. Our inability to timely file our periodic reports with the SEC, as occurred with our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, could have an adverse impact on our ability to, among other things, (i) access our credit facilities, (ii) attract and retain key employees, and (iii) raise funds in the public markets, any of which could materially and adversely affect our financial condition and results of operations.

If our Class A Common Stock is delisted from Nasdaq, a market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

The price of our securities may vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our securities are not listed on, or become delisted from, Nasdaq for any reason, including for failure to maintain compliance with rules for continued listing on Nasdaq, and are quoted on the OTC Bulletin Board or OTC Pink, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on Nasdaq or another national securities exchange. For example, on March 3, 2022, we received a notice from Nasdaq stating that because we had not yet filed our Annual Report on Form 10-K for fiscal year 2021, we were no longer in compliance with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic financial reports with the SEC. On March 17, 2022, we submitted to Nasdaq a plan to regain compliance with Nasdaq’s requirements for continued listing and on March 31, 2022, Nasdaq granted us an extension until May 2, 2022, to regain compliance with Nasdaq’s requirements for continued listing. We subsequently regained compliance with Nasdaq listing requirements.

Our warrants using the trading symbol “VRRMW” were removed from listing by Nasdaq on December 14, 2018, due to an insufficient number of round lot holders following completion of the Business Combination. Those warrants are now quoted on OTC Pink under the symbol “VRRMW.” Accordingly, the liquidity of our warrants may be more limited than if they were quoted or listed on Nasdaq or another national securities exchange. Our securities holders may be unable to sell their securities unless a market can be sustained.

The valuation of our warrants could increase the volatility in our net income (loss) in our consolidated statements of operations and comprehensive income (loss).

The warrants originally issued to Gores Sponsor II, LLC in a private placement in connection with the IPO (the "Private Placement Warrants") are remeasured at the end of each reporting period and any changes in the fair value of the liability are recorded as a gain or loss on the consolidated statements of operations. Significant changes in the fair value of the Private Placement Warrants may create volatility and adversely affect our net income (loss) from period to period.

The change in fair value of our warrants is the result of changes in stock price and warrants outstanding at each reporting period. The change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with the IPO. Significant changes in our stock price or number of

28

warrants outstanding may adversely affect our net income (loss) in our consolidated statements of operations and comprehensive income (loss).

Our business could be negatively affected as a result of actions of activist stockholders or others.

We may be subject to actions or proposals from stockholders or others that may not align with our business strategies or the interests of our other stockholders. Responding to such actions can be costly and time-consuming, disrupt our business and operations, and divert the attention of our Board, management, and employees from the pursuit of our business strategies. Such activities could interfere with our ability to execute our strategic plan. Activist stockholders or others may create perceived uncertainties as to the future direction of our business or strategy which may be exploited by our competitors and may make it more difficult to attract and retain qualified personnel and potential guests, and may affect our relationships with current guests, vendors, investors, and other third parties. In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our Board. The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities.

Risks Related to Our Vendors

Our reliance on third-party providers could have a material adverse effect on our business.

We rely heavily on third-party providers, including subcontractors, manufacturers, software vendors, software application developers, and utility and network providers, to meet their obligations to us in a timely and high-quality manner. For example, we rely on third parties such as the National Law Enforcement Telecommunications System, Polk, DMVDesk, CVR and Dealertrack to provide a direct connection to state departments of motor vehicles (and their European equivalents) and other governmental agencies with which we do not have direct relationships for the driver and other information we use in our business. Our ability to offer our solutions would be materially affected if this access was unavailable or materially restricted, or if the price we pay increased significantly. Our Government Solutions business also relies on a number of third-party manufacturers, including camera manufacturers and automated license plate recognition providers, and outsources some engineering, construction, maintenance, printing and mailing, call center, image review and violations processing work. Further, if one or more tolling authorities cancels our accounts, or stops providing transponders and we are unable to obtain transponders through other sources, our Commercial Services business would be affected. Our Parking Solutions business also relies on a number of domestic and foreign third-party manufacturers in the production of our Pay Station, PARCS and PE hardware solutions, and our inability to access third-party providers could have a material adverse effect on our business.

We also outsource a meaningful percentage of our software development work to third parties. Some of our agreements with these third parties include termination rights, allowing the third party to terminate the arrangement in certain circumstances. For example, the agreements with our third-party payment processors give them the right to terminate the relationship if we fail to keep credit card chargeback and retrieval rates below certain thresholds. If any of our third-party providers are unable or unwilling to meet their obligations to us, fail to satisfy our expectations or those of our customers, including those imposed through flow-down provisions in prime contracts, or if they terminate or refuse to renew their relationships with us on substantially similar terms, we may be unable to find adequate replacements within a reasonable time frame, on favorable commercial terms or at all, and our business, financial condition and results of operations could be materially and adversely affected.

While we perform some due diligence on these third parties and take measures to ensure that they comply with applicable laws and regulations, we do not have an extensive screening or review process and ultimately cannot guarantee our third-party providers will comply with applicable laws, the terms of their agreements or flow-down requirements from our customers. Misconduct or performance deficiencies by any of our third-party providers may be perceived as misconduct or poor performance by us, cause us to fall short on our contractual obligations to our customers or harm our reputation, any of which could have a material adverse effect on our business, financial condition and results of operations.

29

We rely on communications networks and information systems and any interruption could have a material adverse effect on our business.

We rely heavily on the satisfactory performance and availability of our information technology infrastructure and systems, including our websites and network infrastructure, to conduct our business. We rely on third-party communications service and system providers to provide technology services and link our systems with our customers’ networks and systems, including a reliable network backbone with the necessary speed, data capacity and security. We also rely on third-party vendors, including data center, bandwidth and telecommunications equipment providers. A failure or interruption that results in the unavailability of any of our information systems or a major disruption of communications between a system and the customers we serve could disrupt the effective operation of our solutions and otherwise adversely impact our ability to manage our business effectively. We may experience system and service interruptions or disruptions for a variety of reasons, including as the result of network failures, power outages, cyber-attacks, employee errors, software errors, an unusually high volume of transactions, or localized conditions such as fire, explosions or power outages or broader geographic events such as earthquakes, storms, floods, epidemics, strikes, acts of war, civil unrest or terrorist acts. We have taken steps to mitigate our exposure to certain service disruptions by investing in redundant or blended circuits, although the redundant or blended circuits may also suffer disruption. Because we are dependent in part on independent third parties for the implementation and maintenance of certain aspects of our systems and because some of the causes of system interruptions may be outside of our control, we may not be able to remedy such interruptions in a timely manner, or at all. Any interruption or delay in or cessation of these services and systems could significantly disrupt operations, impact customers, damage our reputation, result in litigation, decrease the overall use and acceptance of our solutions, result in lost data and be costly, time consuming and difficult to remedy, any of which could have a material adverse effect on our business, financial condition and results of operations.

General Risk Factors

Uncertainty about current and future economic conditions and other adverse changes in general political conditions.

Adverse macroeconomic conditions, including higher interest rates, inflation, slower growth or recession, barriers to trade, changes to fiscal and monetary policy, tighter credit, high unemployment, currency fluctuations, and other events beyond our control, such as economic sanctions, natural disasters, pandemics, including the COVID-19 pandemic, epidemics, political instability, armed conflicts and wars, including the Russia-Ukraine war, can materially adversely affect demand for our products and services. In addition, consumer spending and activities may be materially adversely affected in response to financial market volatility, negative financial news, conditions in the real estate and mortgage markets, declines in income or asset values, energy shortages and cost increases, labor and healthcare costs and other economic factors, all of which may have a negative affect on our business and results of operations.

Additionally, uncertainty about, or a decline in, global or regional economic conditions may have a significant impact on our suppliers, manufacturers, logistics providers, distributors and other partners. Potential effects on our suppliers and partners include financial instability, inability to obtain credit to finance operations, and insolvency. A downturn in the economic environment can also lead to increased credit and collectability risk on our trade receivables, the failure of derivative counterparties and other financial institutions, limitations on our ability to issue new debt, reduced liquidity, and declines in the fair value of our financial instruments. These and other economic factors can materially adversely affect our business, results of operations, financial condition and stock price.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results.

As a public company, we are required to comply with Section 404 of the Sarbanes Oxley Act of 2002 (“SOX”), which requires, among other things, that companies maintain disclosure controls and procedures to ensure timely disclosure of material information, and that management reviews the effectiveness of those controls on a quarterly basis. During fiscal year 2021, we identified material weaknesses in our internal controls over financial reporting related to: (i) the monitoring and control activities over the acquisition of Redflex Holdings Pty Ltd. due to the lack of sufficient qualified accounting resources to timely identify and assess accounting implications of revenue arrangements assumed as part of the acquisition and to provide adequate controls over the completeness and accuracy of inputs used in accounting for the business combination; and (ii) the design and maintenance of certain revenue and reporting controls related to a third-party application utilized in performing certain control activities and used in the

30

preparation of our consolidated financial statements. As a result of these material weaknesses, management concluded that our internal control over financial reporting was not effective as of December 31, 2021.

During fiscal year 2021, we also identified a material weakness in our internal control over the operation of certain controls over the review of the accounting for our Private Placement Warrants related to the April 12, 2021 SEC Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies. This material weakness resulted in a material misstatement of our private placement warrant liability, change in fair value of private placement warrant liability, additional paid-in capital and accumulated deficit as of December 31, 2020 and 2019 and for years ended December 31, 2020, 2019 and 2018. We restated our consolidated financial statements as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018 upon completing our management’s evaluation of the SEC Staff statement as a part of our remediation measures. As a result of these material weaknesses, management concluded that our internal control over financial reporting was not effective as of December 31, 2020. We completed the remediation measures related to the material weakness during fiscal year 2021.

We cannot be certain that we will be able to maintain adequate controls over our financial processes and reporting in the future or that we will be able to comply with our obligations under Section 404 of SOX. If we fail to maintain the adequacy of our internal controls, we cannot assure our stockholders that we will be able to conclude in the future that we have effective internal control over financial reporting, and/or we may encounter difficulties in implementing or improving our internal controls, which could harm our operating results or cause us to fail to meet our reporting obligations. If we fail to maintain effective internal controls, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities may be negatively affected, and we could be subject to sanctions or investigation by regulatory authorities, such as the SEC or Nasdaq.

Litigation and other disputes and regulatory investigations could have a material adverse effect on our business.

From time to time, we may be involved in litigation and other disputes or regulatory investigations that arise in and outside the ordinary course of business. We expect that the number, frequency and significance of these matters may increase as our business expands and we grow as a company. Litigation, disputes, or regulatory investigations may relate to, among other things, intellectual property, commercial arrangements, negligence and fiduciary duty claims, vicarious liability based upon conduct of individuals or entities outside of our control, including our third-party service providers, antitrust claims, deceptive trade practices, claims related to invoicing, personal injury claims, general fraud claims and employment law claims, including compliance with wage and hour regulations and contractual requirements. An adverse determination may result in liability to us for the claim and may also result in the imposition of penalties and/or fines. Like other companies that handle sensitive personal and payment information, we also face the possibility of allegations regarding employee fraud or misconduct. In addition to more general litigation, at times we are also a named party in claims made against our customers, including putative class actions challenging the legality and constitutionality of automated photo enforcement and other similar programs of our Government Solutions customers and consumer fraud claims brought against our RAC customers alleging faulty disclosures regarding our services.

As a public company, we may also be subject to securities class action and stockholder derivative lawsuits. From time to time, we may also be reviewed or investigated by U.S. federal, state, or local regulators or regulators in the foreign jurisdictions in which we operate regarding similar and other matters, including tax assessments.

These investigations can be commenced at the initiative of the governmental authority or as a result of complaints by private citizens, regardless of whether the complaint has any merit. At times, we are also required to obtain licensing and permitting, including with respect to matters such as general contracting, performance of engineering services, performance of electrical work and performance of private investigative work. Although we carry general liability insurance coverage, our insurance may not cover all potential claims to which we are exposed, whether as a result of a dispute, litigation or governmental investigation, and it may not adequately indemnify us for all liability that may be imposed.

31

Any claims against us or investigation into our business and activities, whether meritorious or not, could be time consuming, result in significant legal and other expenses, require significant amounts of management time and result in the diversion of significant operational resources. Class action lawsuits can often be particularly burdensome given the breadth of claims, large potential damages and significant costs of defense. In the case of intellectual property litigation and proceedings, adverse outcomes could include the cancellation, invalidation or other loss of material intellectual property rights used in our business and injunctions prohibiting our use of business processes or technology that is subject to third-party patents or other third-party intellectual property rights. Legal or regulatory matters involving our directors, officers or employees in their individual capacities can also create exposure for us because we may be obligated or may choose to indemnify the affected individuals against liabilities and expenses they incur in connection with such matters. Regulatory investigations, including with respect to proper licensing, payment of wages, procurement practices or permitting, can also lead to enforcement actions, fines and penalties, the loss of a license or permit or the assertion of private litigation claims. Risks associated with these liabilities are often difficult to assess or quantify and their existence and magnitude can remain unknown for significant periods of time, making the amount of any legal reserves related to these legal liabilities difficult to determine and, if a reserve is established, subject to future revision. Future results of operations could be adversely affected if any reserve that we establish for a legal liability is increased or the underlying legal proceeding, investigation or other contingency is resolved for an amount in excess of established reserves. Because litigation and other disputes and regulatory investigations are inherently unpredictable, the results of any of these matters may have a material adverse effect on our business, financial condition and results of operations.

Risks related to laws and regulations and any changes in those laws could have a material adverse effect on our business.

We are subject to multiple, and sometimes conflicting, laws and regulations in the countries, states and localities in which we operate. We are required to comply with certain SEC, Nasdaq and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly.

In addition to the laws and regulations discussed elsewhere in these risk factors regarding data privacy, foreign operations and other matters, we are subject to laws regarding transportation safety, consumer protection, procurement, anti-kickback, labor and employment matters, competition and antitrust, payment processing, intellectual property, environmental matters, and other trade-related laws and regulations. Certain of our operations are also subject to oversight by the USDOT, the Federal Communications Commission, the U.S. Consumer Product Safety Commission, and the Environmental Protection Agency, as well as comparable state and local agencies, including departments of transportation, departments of motor vehicles, professional licensing authorities and offices of inspector general. Our Government Solutions segment is also subject to laws related to the use of automated traffic enforcement, the capture, access and retention of data and matters related to government contracting.

Recent years have seen a substantial increase in the number of new laws and regulations and the rate of change and enforcement of many of these types of laws and regulations. We cannot predict the nature, scope or impact of future laws, regulatory requirements or similar standards may have on our business, whether implemented through changes to existing laws or the way they are administered or interpreted, or through entirely new regulations. Future laws, regulations, and standards or any changed interpretation or administration of existing laws or regulations could limit the continued use or adoption of one or more of our solutions, require us to incur additional costs, impact our ability to develop and market new solutions or impact our ability to retain existing business and secure new business. We may not be able to respond in a reasonable or cost-effective manner, or at all. Even if we make what we believe are appropriate changes, there is no certainty those actions will comply.

Any alleged or actual violations of any law or regulation, change in law or regulation or changes in the interpretation of existing laws or regulations may subject us to government scrutiny, including government or regulatory investigations and enforcement actions, civil and criminal fines and penalties, and negative publicly, or otherwise have a material adverse effect on our business, financial condition and results of operations.

Our failure to properly perform under our contracts or otherwise satisfy our customers could have a material adverse effect on our business.

Our business model depends in large part on our ability to retain existing work and attract new work from existing customers. If a customer is not satisfied with our products, services or solutions or the timeliness or quality of our work, we may incur additional costs to address the problem, the profitability of that contract may be impaired, we may experience payment delays, it could do harm to our reputation and hinder our ability to win new work from prospective customers. Failure to properly transition new customers to our systems or existing customers to our different systems, properly budget transition costs or accurately estimate contract costs could also result in delays and general customer dissatisfaction. Many of our contracts may be terminated by the customer upon specified advance notice without cause. Any failure to properly perform under our contracts or meet our customers’ expectations could have a material adverse effect on our business, financial condition and results of operations.

32

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.

We are subject to income taxes in numerous countries, and our domestic tax liabilities are subject to the allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

•changes in the valuation of our deferred tax assets and liabilities;

•expected timing and amount of the release of any tax valuation allowances;

•tax effects of stock-based compensation;

•costs related to intercompany restructurings;

•changes in tax laws, regulations or interpretations thereof; or

•lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.

In addition, we are subject to audits of our income, sales and other transaction taxes by U.S. federal and state authorities, as well as foreign tax authorities. Outcomes from these audits could have an adverse effect on our financial condition and results of operations.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We lease all of the properties used in our business, including 108,956 square feet of office space for our corporate headquarters in Mesa, Arizona. In addition to the corporate headquarters, we lease office space in various locations for corporate and administrative purposes and multiple small warehouse locations. We do not consider any of these properties to be material to our overall business.

33

Item 3. Legal Proceedings

We are subject to legal and regulatory actions that arise from time to time in the ordinary course of business, and may be subject to similar or other claims in the future. Legal disputes and other claims and proceedings may relate to, among other things, intellectual property, commercial arrangements, negligence and fiduciary duty claims, vicarious liability based on conduct of individuals or entities outside of our control, including our third-party service providers, antitrust claims, deceptive trade practices, general fraud claims and employment law claims, including compliance with wage and hour regulations. In addition to more general litigation, at times we have also been a named party in claims made against our customers, including putative class actions challenging the legality and constitutionality of automated photo enforcement and other similar programs of our Government Solutions customers, and consumer fraud claims brought against us and our Commercial Services customers alleging faulty disclosures regarding our services. From time to time, we may also be reviewed or investigated by U.S. federal, state or local regulators or regulators in the foreign jurisdictions in which we operate regarding these and other matters, including proper licensing and tax assessments. All litigation is inherently unpredictable and we could incur judgments or enter into settlements or claims in the future that could materially impact our results.

On November 2, 2020, PlusPass, Inc. (“PlusPass”) commenced an action in the United States District Court, Central District of California, against Verra Mobility, The Gores Group LLC, Platinum Equity LLC, and ATS Processing Services, Inc., alleging civil violations of federal antitrust statutes: Section 7 of the Clayton Antitrust Act of 1914 (the “Clayton Act”), and Sections 1 and 2 of the Sherman Act. On November 20, 2020, PlusPass filed a First Amended Complaint. On February 9, 2021, the defendants filed motions to dismiss, and PlusPass subsequently abandoned various theories and claims and dismissed The Gores Group LLC, Platinum Equity LLC, and ATS Processing Services, Inc. On April 27, 2021, PlusPass filed a Second Amended Complaint (“SAC”), alleging that Verra Mobility violated Section 7 of the Clayton Act through the merger of Highway Toll Administration, LLC (“HTA”) and American Traffic Solutions, Inc. (“ATS”) in 2018, and that Verra Mobility violated Sections 1 and 2 of the Sherman Antitrust Act of 1890 by using exclusive agreements in restraint of trade and other allegedly anticompetitive means to acquire and maintain monopoly power in the market for the administration of electronic toll payment collection for rental cars. PlusPass seeks injunctive relief, divestiture by Verra Mobility of HTA, damages in an amount to be determined, and attorneys’ fees and costs. On May 28, 2021, Verra Mobility filed a motion to dismiss the SAC in its entirety, which was denied in August 2021. Discovery is underway and trial has been set for November 2023. Verra Mobility believes that all of PlusPass' claims are without merit and will defend itself vigorously in this litigation.



Item 4. Mine Safety Disclosures

Not applicable.

34

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our Class A Common Stock is currently quoted on Nasdaq under the symbol “VRRM” and our warrants are currently quoted on OTC Pink under the symbol “VRRMW.”

The following table sets forth the high and low sales prices per share of our Class A Common Stock as reported on Nasdaq for the two most recent fiscal years:

	Fiscal Year 2022				Fiscal Year 2021
	High		Low		High		Low
First Quarter	$	18.13	$	14.10	$	15.38	$	12.54
Second Quarter	$	16.73	$	12.70	$	15.94	$	13.38
Third Quarter	$	17.31	$	14.92	$	17.50	$	14.26
Fourth Quarter	$	17.60	$	12.76	$	17.01	$	13.47

Holders of Record

As of December 31, 2022, we had six holders of record of our Class A Common Stock. Because many of our shares of Class A Common Stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Warrants

As of December 31, 2022, there were warrants outstanding to acquire 19,999,967 shares of our Class A Common Stock including: (i) 6,666,666 Private Placement Warrants; and (ii) 13,333,301 warrants issued in connection with the IPO (the “Public Warrants” and, together with the Private Placement Warrants, the “Warrants”). The Warrants entitle the registered holder to purchase one share of our Class A Common Stock at a price of $11.50 per share, subject to certain adjustments.

The Warrants became exercisable on November 16, 2018, 30 days following the completion of the Business Combination, and expire five years after that date, or earlier upon redemption or liquidation. We may redeem the outstanding Warrants at a price of $0.01 per warrant, if the last sale price of our Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third business day before we send the notice of redemption to the Warrant holders. The Private Placement Warrants, however, are nonredeemable so long as they are held by Gores Sponsor II, LLC or its permitted transferees.

Dividends

We have not paid any cash dividends on our Class A Common Stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends is within the discretion of our Board. In addition, our Board is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, our ability to declare dividends is limited by restrictive covenants in the agreements governing our indebtedness.

Securities Authorized for Issuance Under Equity Compensation Plans

The information required by this item with respect to our equity compensation plans is incorporated by reference to our Proxy Statement for the 2023 annual meeting of stockholders.

35

Stock Performance Graph

 

The graph above compares the cumulative total return on our Class A Common Stock with that of the S&P 500 Index, the S&P Composite 1500 Data Processing & Outsourced Services Index and the Russell 2000 Index. The period shown commences on October 18, 2018 and ends on December 31, 2022, the end of our last fiscal year. The graph assumes an investment of $100 in each of the above on the close of market on October 18, 2018. We did not declare or pay any dividends on our Class A Common Stock during the comparison period. The stock performance graph is not necessarily indicative of future price performance.

This performance graph is not deemed to be incorporated by reference into any of our other filings under the Exchange Act, or the Securities Act, except to the extent we specifically incorporate it by reference into such filings.

Recent Sales of Unregistered Securities and Use of Proceeds

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In May 2022, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $125.0 million of our outstanding shares of Class A common stock over a 12-month period in open market, accelerated share repurchase (“ASR”) or privately negotiated transactions, each as permitted under applicable rules and regulations, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1 of the Exchange Act.

We subsequently paid $50.0 million in May 2022 to repurchase outstanding shares of our Class A Common Stock through an ASR, and received an initial delivery of 2,739,726 shares. The final settlement occurred in August 2022, at which time we received 445,086 additional shares. In addition, during the second and third quarters, we paid $6.9 million and repurchased 445,791 shares of our Class A Common Stock through open market transactions. Our Board of Directors authorized a second ASR during the third quarter of 2022 for the remaining availability under the share repurchase program and we paid $68.1 million in August 2022 and received an initial delivery of 3,300,000

36

shares of our Class A Common Stock. The final settlement occurred in November 2022, at which time we received 943,361 additional shares.

In November 2022, 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 in open market, ASR or privately negotiated transactions, each as permitted under applicable rules and regulations, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1 of the Exchange Act. The Company has not yet repurchased shares under this repurchase program.

The following details the purchases of the Company's Class A Common Stock during the three months ended December 31, 2022:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Dollar Value of Shares that May Yet to be Purchased Under the Plans or Programs
As of October 1, 2022		—	$	—		—	$	—
Share repurchases		—	$	—		—	$	—
As of October 31, 2022		—	$	—		—	$	—
Share repurchases (1)		943,361	$	16.27		943,361	$	—
As of November 30, 2022		943,361	$	—		943,361	$	100,000,000
Share repurchases		—	$	—		—	$	—
As of December 31, 2022		943,361	$	—		943,361	$	100,000,000

(1) This relates to the final share settlement of the second ASR on November 4, 2022.

Earn-Out Agreement

Under the Merger Agreement, the Platinum Stockholder is entitled to receive additional shares of Class A Common Stock (the “Earn-Out Shares”) if the volume weighted average closing sale price of one share of Class A Common Stock on the Nasdaq exceeds certain thresholds for a period of at least 10 days out of 20 consecutive trading days at any time during the five-year period following the closing of the Business Combination (the “Common Stock Price”). The expiration of the five-year period is October 17, 2023.

The Earn-Out Shares are issued by the Company to the Platinum Stockholder as follows:

Common Stock Price Thresholds	One-time Issuance of Shares
> $13.00 (a)	2,500,000
> $15.50 (a)	2,500,000
> $18.00	2,500,000
> $20.50	2,500,000

(a)The first and second tranches of Earn-Out Shares have been issued, as discussed below.

If any of the Common Stock Price thresholds above (each, a “Triggering Event”) are not achieved within the five-year period following the closing of the Business Combination, the Company will not be required to issue the Earn-Out Shares in respect of such Common Stock Price threshold. In no event shall the Platinum Stockholder be entitled to receive more than an aggregate of 10,000,000 Earn-Out Shares.

If, during the earn-out period, there is a change of control (as defined in the Merger Agreement) that will result in the holders of our Class A Common Stock receiving a per share price equal to or in excess of the applicable Common Stock Price required in connection with any Triggering Event, then immediately prior to the consummation of such change of control: (a) any such Triggering Event that has not previously occurred shall be deemed to have occurred; and (b) the Company shall issue the applicable Earn-Out Shares to the cash consideration stockholders (as defined in the Merger Agreement) (in accordance with their respective pro rata cash share), and the recipients of the issued Earn-Out Shares shall be eligible to participate in such change of control.

37

The Company estimated the original fair value of the contingently issuable shares to be $73.15 million, of which $36.6 million remains contingently issuable as of December 31, 2022. The estimated value is not subject to future revisions during the five-year period discussed above. The Company used a Monte Carlo simulation option-pricing model to arrive at its original estimate. Each tranche was valued separately giving specific consideration to the tranche’s price target. The simulation considered volatility and risk-free rates utilizing a peer group based on a five-year term. This was initially recorded as a distribution to shareholders and was presented as common stock contingent consideration. Upon the occurrence of a Triggering Event, any issuable shares are transferred from common stock contingent consideration to common stock and additional paid-in capital accounts. Any contingently issuable shares not issued as a result of a Triggering Event not being attained by the end of the earn-out period will be canceled.

On April 26, 2019 and on January 27, 2020, the Triggering Events for the issuance of the first and second tranches of Earn-Out Shares occurred, as the volume weighted average closing sale price per share of the Company’s Class A Common Stock as of that date had been greater than $13.00 and $15.50, respectively, for 10 out of 20 consecutive trading days. These Triggering Events resulted in the issuance of an aggregate 5,000,000 shares of the Company’s Class A Common Stock to the Platinum Stockholder and an increase in the Company’s common stock and additional paid-in capital accounts of $36.6 million, with a corresponding decrease to the common stock contingent consideration account. At December 31, 2022, the potential future shares issuable pursuant to the earn-out are between zero and 5.0 million.

Item 6. Selected Financial Data

Not applicable.

38

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with the consolidated financial statements and the related notes that are included in Item 8 of Part II of this Annual Report.

Business Overview

We are a leading provider of smart mobility technology solutions 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 fleet owners such as RACs and FMCs, governments, universities, parking operators, healthcare facilities, transportation hubs and other violation-issuing authorities.

Executive Summary

We operate under long-term contracts and a highly reoccurring service revenue model. We continue to execute our strategy to grow revenue organically and expand offerings into adjacent markets through innovation or acquisition. During the periods presented, we:

•Increased total revenue by $191.0 million, or 35%, from $550.6 million in fiscal year 2021 to $741.6 million in fiscal year 2022. Redflex and T2 Systems contributed $113.9 million to revenue growth, and the remaining increase was mainly due to service revenue resulting from increased travel volume and tolling activity in 2022 in the Commercial Services segment and expansion of speed programs in the Government Solutions segment; and

•Generated cash flows from operating activities of $218.3 million, $193.2 million, and $46.9 million for fiscal years 2022, 2021 and 2020, respectively. Our cash on hand was $105.2 million as of December 31, 2022.

•Authorized two share repurchase programs, together totaling $225.0 million, during fiscal year 2022. We used existing cash on hand of $125.0 million to repurchase shares under the first repurchase program and have not yet repurchased shares under the second repurchase program.

•Entered into an interest rate swap agreement to hedge our exposure to interest rate fluctuations associated with the LIBOR portion of the variable interest rate on our 2021 Term Loan.

Significant Events Impacting Our Business

Share Repurchase and Retirement

On May 7, 2022, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $125.0 million of our outstanding Class A Common Stock over the next 12 months from time to time in open market, ASR or privately negotiated transactions, each as permitted under applicable rules and regulations, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1 of the Exchange Act.

On May 12, 2022, we paid $50.0 million for an ASR, and received an initial delivery of 2,739,726 shares of our Class A Common Stock in accordance with an ASR agreement with a third-party financial institution. The final settlement occurred on August 3, 2022, at which time, we received 445,086 additional shares calculated using a volume-weighted average price over the term of the ASR agreement. In addition, we paid $6.9 million and repurchased 445,791 shares of our Class A Common Stock through open market transactions during the year ended December 31, 2022. Our Board of Directors authorized a second ASR during the third quarter of 2022 for the remaining availability under the share repurchase program. On August 19, 2022, we paid $68.1 million for this second ASR and received an initial delivery of 3,300,000 shares of our Class A Common Stock in accordance with an ASR agreement with a third-party financial institution. The final settlement occurred on November 4, 2022, at which time, we received 943,361 additional shares calculated using a volume-weighted average price over the term of the ASR agreement. We used

39

existing cash on hand and paid a total of $125.0 million for shares repurchases and $0.1 million for direct costs during the year ended December 31, 2022.

In November 2022, 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 in open market, ASR or privately negotiated transactions, each as permitted under applicable rules and regulations, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1 of the Exchange Act. The Company has not yet repurchased shares under this repurchase program.

Interest Rate Swap Agreement

In December 2022, we entered into a cancellable interest rate swap agreement to hedge our exposure to interest rate fluctuations associated with the LIBOR portion of the variable interest rate on our 2021 Term Loan. Under the interest rate swap agreement, we pay a fixed rate and the counterparty pays a variable interest rate which is net settled. The notional amount on the interest rate swap is $675 million. We have the option to terminate the interest rate swap agreement starting in December 2023, and monthly thereafter until December 2025, in the event interest rates decrease. Any changes in the fair value of the derivative instrument (including accrued interest) are recorded in the consolidated statements of operations within the gain on interest rate swap line item, and we recorded a $1.0 million gain for the year ended December 31, 2022. See Note 2, Significant Accounting Policies, in Item 8, Financial Statements and Supplementary Data, for additional information on the interest rate swap.

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 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 within the United States and Canada. The international operations through Redflex primarily involve the sale of traffic enforcement products and related maintenance services.

•Our Parking Solutions segment provides an integrated suite of parking software and hardware solutions to universities, municipalities, parking operators, healthcare facilities and transportation hubs 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.

During the third quarter of 2022, we changed our measure of segment profit to include (gain) loss on disposal of assets, net, and to exclude transaction and transformation expenses that were previously included within the selling, general and administrative expenses and other income, net line items. The comparable periods have been recast to conform to the revised presentation, although the impact of this revision to previously reported segment profit was not material. See Note 18, Segment Reporting.

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

40

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, 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. Cost of service revenue 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 and install 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, acquisition costs 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.

Change in Fair Value of Private Placement Warrants. Change in fair value of private placement warrants consists of liability adjustments related to the 6,666,666 Private Placement Warrants originally issued to Gores Sponsor II, LLC re-measured to fair value at the end of each reporting period.

Tax Receivable Agreement Liability Adjustment. This consists of adjustments made to our Tax Receivable Agreement liability due to changes in estimates.

Gain on Interest Rate Swap. Gain on interest rate swap relates to the gain associated with the derivative instrument re-measured to fair value at the end of each reporting period.

(Gain) Loss on Extinguishment of Debt. (Gain) loss on extinguishment of debt generally consists of early payment penalties and the write-off of original issue discounts and deferred financing costs associated with debt extinguishment, and any gains recognized as a result of loan forgiveness.

41

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

Results of Operations

Fiscal Year 2022 Compared to Fiscal Year 2021

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.

	Year Ended December 31,
							Percentage of Revenue						Increase (Decrease)  2022 vs 2021
($ in thousands)	2022			2021			2022			2021			$			%
Service revenue	$	695,218		$	492,846			93.7	%		89.5	%	$	202,372			41.1	%
Product sales		46,380			57,744			6.3	%		10.5	%		(11,364	)		(19.7	)%
Total revenue		741,598			550,590			100.0	%		100.0	%		191,008			34.7	%
Cost of service revenue		16,330			5,337			2.2	%		1.0	%		10,993			206.0	%
Cost of product sales		30,932			29,809			4.2	%		5.4	%		1,123			3.8	%
Operating expenses		226,324			163,370			30.5	%		29.7	%		62,954			38.5	%
Selling, general and administrative expenses		163,133			123,407			22.0	%		22.4	%		39,726			32.2	%
Depreciation, amortization and (gain) loss on disposal of assets, net		140,174			116,801			18.9	%		21.2	%		23,373			20.0	%
Total costs and expenses		576,893			438,724			77.8	%		79.7	%		138,169			31.5	%
Income from operations		164,705			111,866			22.2	%		20.3	%		52,839			47.2	%
Interest expense, net		69,372			44,942			9.4	%		8.1	%		24,430			54.4	%
Change in fair value of private placement warrants		(14,400	)		7,600			(2.0	)%		1.4	%		(22,000	)		(289.5	)%
Tax receivable agreement liability adjustment		(720	)		(1,016	)		(0.1	)%		(0.2	)%		296			(29.1	)%
Gain on interest rate swap		(996	)		—			(0.1	)%		—			(996	)	n/a
(Gain) loss on extinguishment of debt		(3,005	)		5,334			(0.4	)%		1.0	%		(8,339	)		(156.3	)%
Other income, net		(12,654	)		(12,895	)		(1.7	)%		(2.3	)%		241			(1.9	)%
Total other expenses		37,597			43,965			5.1	%		8.0	%		(6,368	)		(14.5	)%
Income before income taxes		127,108			67,901			17.1	%		12.3	%		59,207			87.2	%
Income tax provision		34,633			26,452			4.6	%		4.8	%		8,181			30.9	%
Net income	$	92,475		$	41,449			12.5	%		7.5	%	$	51,026			123.1	%

Service Revenue. Service revenue increased by $202.4 million, or 41.1%, to $695.2 million for fiscal year 2022 from $492.8 million in fiscal year 2021, representing 93.7% and 89.5% of total revenue, respectively. The following table depicts service revenue by segment:

	Year Ended December 31,
					Percentage of Revenue						Increase (Decrease)  2022 vs 2021
($ in thousands)	2022		2021		2022			2021			$		%
Service revenue
Commercial Services	$	325,971	$	260,899		44.0	%		47.4	%	$	65,072		24.9	%
Government Solutions		307,639		227,992		41.4	%		41.4	%		79,647		34.9	%
Parking Solutions		61,608		3,955		8.3	%		0.7	%		57,653		1457.7	%
Total service revenue	$	695,218	$	492,846		93.7	%		89.5	%	$	202,372		41.1	%

Commercial Services service revenue includes mainly toll and violation management revenues from RACs and FMCs. Commercial Services service revenue increased by $65.1 million, or 24.9%, from $260.9 million in fiscal year

42

2021 to $326.0 million in fiscal year 2022. This increase was primarily due to the increase in travel volume in 2022 compared to 2021 which was negatively impacted by the COVID-19 pandemic, especially in the first three months of 2021. The volume of tolls incurred by RAC vehicles increased along with a shift towards an all-inclusive fee structure from an incidental or daily usage rate and higher pricing for certain products contributed to a $45.4 million increase, and the tolling related revenue generated by our FMC customers contributed to a $11.8 million increase during the year ended December 31, 2022 compared to the same period in 2021.

Government Solutions service revenue includes revenue from speed, red-light, school bus stop arm and bus lane photo enforcement systems. Service revenue was $307.6 million and $228.0 million for the years ended December 31, 2022, and 2021, respectively, and it increased by $79.6 million. Redflex operations contributed $37.4 million to our growth year-over-year. Organic growth excluding Redflex was $42.2 million, which was primarily driven by the expansion of school zone speed programs, and speed is the largest product in this segment. We added 752 speed cameras in 2021, excluding Redflex, which provided for service revenue growth in 2022, and added 632 speed cameras in 2022 which provided growth in the current period and will continue to provide growth for 2023 and beyond. The remaining growth is attributable to other expansions and improvement in variable rate programs that recovered from COVID-19 to more normalized volumes.

Parking Solutions service revenue increased to $61.6 million in fiscal year 2022 compared to $4.0 million in 2021 due to only 23 days of activity being included in fiscal year 2021 since the date of acquisition.

Product Sales. Product sales decreased $11.4 million year over year and were $46.4 million and $57.7 million for fiscal years 2022 and 2021, respectively. The product sales for the Government Solutions business decreased by $26.1 million largely from a single customer whose buying patterns varied from period to period. This decrease was offset by a $14.8 million growth generated from T2 Systems' product sales year over year.

Cost of Service Revenue. Cost of service revenue increased from $5.3 million for fiscal year 2021 to $16.3 million for fiscal year 2022. The $11.0 million increase was mainly attributable to the inclusion of costs in the Parking Solutions segment for the full year compared to only 23 days in the prior year. The costs in this line item will be higher in future periods due to higher recurring service costs for the Parking Solutions business.

Cost of Product Sales. Cost of product sales increased slightly year over year and was $30.9 million and $29.8 million for the fiscal years 2022 and 2021, respectively. This was mainly due to increased costs from the inclusion of T2 Systems for the full year compared to only 23 days in the prior year, offset by the reduced costs resulting from the decrease in product sales to Government Solutions customers.

Operating Expenses. Operating expenses increased by $63.0 million, or 38.5%, from $163.4 million for fiscal year 2021 to $226.3 million in fiscal year 2022. This was primarily due to an aggregate $56.0 million increase in costs in the Government Solutions and Parking Solutions segments resulting from increased wages expense, subcontractor expenses, recurring services and information technology costs from the inclusion of Redflex for the full fiscal year in 2022 compared to approximately two hundred days in 2021 and T2 Systems' operations for the full fiscal year in 2022 compared to only 23 days in the prior year. Operating expenses as a percentage of total revenue increased from 29.7% to 30.5% in fiscal years 2021 and 2022, respectively. The following table presents operating expenses by segment:

	Year Ended December 31,
					Percentage of Revenue						Increase (Decrease)  2022 vs 2021
($ in thousands)	2022		2021		2022			2021			$		%
Operating expenses
Commercial Services	$	72,328	$	65,718		9.8	%		12.0	%	$	6,610		10.1	%
Government Solutions		139,961		96,284		18.9	%		17.5	%		43,677		45.4	%
Parking Solutions		12,905		553		1.7	%		0.1	%		12,352		2233.6	%
Total operating expenses before stock-based compensation		225,194		162,555		30.4	%		29.6	%		62,639		38.5	%
Stock-based compensation		1,130		815		0.1	%		0.1	%		315		38.7	%
Total operating expenses	$	226,324	$	163,370		30.5	%		29.7	%	$	62,954		38.5	%

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $39.7 million to $163.1 million for fiscal year 2022 compared to $123.4 million for fiscal year 2021. The increase is primarily due to an aggregate $35.9 million increase due to the inclusion of Redflex for the full fiscal year in 2022 as compared to approximately two hundred days in the prior year and T2 Systems' operations included for the full fiscal

43

year in 2022 compared to only 23 days in the prior year. In addition, we had an increase of $13.7 million in the Commercial Services segment from increased wages expense, professional services and credit loss expenses year over year, and a $2.6 million increase in total stock-based compensation expense compared to the prior year. These increases were partially offset by a $12.5 million decrease in certain transaction and transformation costs compared to 2021. Selling, general and administrative expenses as a percentage of total revenue decreased slightly from 22.4% to 22.0% in fiscal years 2021 and 2022, respectively. The following table presents selling, general and administrative expenses by segment:

	Year Ended December 31,
					Percentage of Revenue						Increase (Decrease)  2022 vs 2021
($ in thousands)	2022		2021		2022			2021			$			%
Selling, general and administrative expenses
Commercial Services	$	56,105	$	42,386		7.5	%		7.7	%	$	13,719			32.4	%
Government Solutions		61,235		51,052		8.3	%		9.3	%		10,183			19.9	%
Parking Solutions		27,104		1,361		3.7	%		0.2	%		25,743			1891.5	%
Corporate and other		3,156		15,639		0.4	%		2.8	%		(12,483	)		(79.8	)%
Total selling, general and administrative expenses before stock-based compensation		147,600		110,438		19.9	%		20.0	%		37,162			33.6	%
Stock-based compensation		15,533		12,969		2.1	%		2.4	%		2,564			19.8	%
Total selling, general and administrative expenses	$	163,133	$	123,407		22.0	%		22.4	%	$	39,726			32.2	%

Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, increased by $23.4 million to $140.2 million for 2022 from $116.8 million for 2021. This was mainly due to increased amortization and depreciation expense from the inclusion of T2 Systems' operations for the full fiscal year in 2022 compared to only 23 days in the prior year and Redflex for the full fiscal year in 2022 as compared to approximately two hundred days in the prior year.

Interest Expense, Net. Interest expense, net increased by approximately $24.4 million from $44.9 million in fiscal year 2021 to $69.3 million in fiscal year 2022. This increase is due to higher outstanding debt in 2022 which included the $250 million of incremental term loan borrowing, and higher interest rates on our variable debt for six months of fiscal year 2022. See “Liquidity and Capital Resources” below.

Change in Fair Value of Private Placement Warrants. We recorded a $14.4 million gain and a $7.6 million loss in fiscal years 2022 and 2021, respectively, related to the changes in fair value of our Private Placement Warrants which are accounted for as liabilities on our consolidated balance sheets. The change in fair value is the result of re-measurement of the liability at the end of each reporting period.

Tax Receivable Agreement Liability Adjustment. We recorded $0.7 million and $1.0 of tax benefits in fiscal years 2022 and 2021, respectively, as a result of lower estimated state tax rates due to changes in apportionment.

Gain on Interest Rate Swap. We recorded a $1.0 million gain related to the interest rate swap associated with mark-to-market adjustments from re-measuring to fair value at the end of the reporting period.

(Gain) Loss on Extinguishment of Debt. We recorded a $3.0 million gain on extinguishment of debt during the year ended December 31, 2022 related to the forgiveness of the PPP loan, which is further discussed below. Loss on extinguishment of debt was $5.3 million for the year ended December 31, 2021 consisting of a $4.0 million write-off of pre-existing deferred financing costs and discounts and $1.3 million of lender and third-party costs associated with the issuance of the 2021 Term Loan, as discussed and defined below.

Other Income, Net. Other income, net was $12.7 million in fiscal year 2022 compared to $12.9 million in fiscal year 2021. The slight decrease was primarily due to income resulting from volume rebates earned from total spend on purchasing cards from increased tolling activity, especially in the RAC industry, offset by a $1.3 million impairment related to an equity investment and the remaining due to other non-operating expenses incurred in 2022.

44

Income Tax Provision. Income tax provision was $34.6 million representing an effective tax rate of 27.2% for fiscal year 2022 compared to $26.5 million, representing an effective tax rate of 39.0% for fiscal year 2021. The Company’s effective tax rate for 2022 was lower compared to 2021 primarily due to an increase in pre-tax income in 2022 combined with the permanent differences related to the mark-to-market adjustment on the private placement warrants and the adjustments to the carrying value of the Company’s tax receivable agreement liability.

Net Income. We had net income of $92.5 million for fiscal year 2022 compared to a net income of $41.4 million for 2021. The $51.0 million increase in net income was primarily due to the increase in service revenue and the other statement of operations activity discussed above.

Fiscal Year 2021 Compared to Fiscal Year 2020

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.

	Year Ended December 31,
							Percentage of Revenue						Increase (Decrease)  2021 vs 2020
($ in thousands)	2021			2020			2021			2020			$			%
Service revenue	$	492,846		$	336,274			89.5	%		85.4	%	$	156,572			46.6	%
Product sales		57,744			57,319			10.5	%		14.6	%		425			0.7	%
Total revenue		550,590			393,593			100.0	%		100.0	%		156,997			39.9	%
Cost of service revenue		5,337			3,967			1.0	%		1.0	%		1,370			34.5	%
Cost of product sales		29,809			29,573			5.4	%		7.5	%		236			0.8	%
Operating expenses		163,370			115,729			29.7	%		29.4	%		47,641			41.2	%
Selling, general and administrative expenses		123,407			89,664			22.4	%		22.8	%		33,743			37.6	%
Depreciation, amortization and (gain) loss on disposal of assets, net		116,801			116,844			21.2	%		29.7	%		(43	)		(0.0	)%
Total costs and expenses		438,724			355,777			79.7	%		90.4	%		82,947			23.3	%
Income from operations		111,866			37,816			20.3	%		9.6	%		74,050			195.8	%
Interest expense, net		44,942			40,865			8.1	%		10.4	%		4,077			10.0	%
Change in fair value of private placement warrants		7,600			1,133			1.4	%		0.3	%		6,467			570.8	%
Tax receivable agreement liability adjustment		(1,016	)		6,850			(0.2	)%		1.7	%		(7,866	)		(114.8	)%
Loss on extinguishment of debt		5,334			—			1.0	%		—			5,334		n/a
Other income, net		(12,895	)		(11,885	)		(2.3	)%		(3.0	)%		(1,010	)		8.5	%
Total other expenses		43,965			36,963			8.0	%		9.4	%		7,002			18.9	%
Income before income taxes		67,901			853			12.3	%		0.2	%		67,048			7860.3	%
Income tax provision		26,452			5,431			4.8	%		1.4	%		21,021			387.1	%
Net income (loss)	$	41,449		$	(4,578	)		7.5	%		(1.2	)%	$	46,027			1005.4	%

Service Revenue. Service revenue increased by $156.6 million, or 46.6%, to $492.8 million for fiscal year 2021 from $336.3 million in fiscal year 2020, representing 89.5% and 85.4% of total revenue, respectively. The following table depicts service revenue by segment:

	Year Ended December 31,
					Percentage of Revenue						Increase (Decrease)  2021 vs 2020
($ in thousands)	2021		2020		2021			2020			$		%
Service revenue
Commercial Services	$	260,899	$	180,856		47.4	%		46.0	%	$	80,043		44.3	%
Government Solutions		227,992		155,418		41.4	%		39.4	%		72,574		46.7	%
Parking Solutions		3,955		—		0.7	%		—			3,955	n/a
Total service revenue	$	492,846	$	336,274		89.5	%		85.4	%	$	156,572		46.6	%

45

Commercial Services service revenue includes toll and violation management revenues from RACs and FMCs. Commercial Services service revenue increased by $80.0 million, or 44.3%, from $180.9 million in fiscal year 2020 to $260.9 million in fiscal year 2021. This increase was primarily due to the wide distribution of COVID-19 vaccines and the lifting of travel restrictions that positively impacted the travel industry in 2021. Our RAC customers experienced a rebound in leisure travel that impacted our volume in 2021 compared to the prior year which was negatively impacted by the COVID-19 pandemic.

Government Solutions service revenue includes revenue from speed, red-light, school bus stop arm and bus lane photo enforcement systems. Service revenue was $228.0 million and $155.4 million for the years ended December 31, 2021, and 2020, respectively, and it increased by $72.6 million. The acquisition of Redflex on June 17, 2021 contributed $33.0 million to our year-over-year growth. Organic growth excluding Redflex was $39.6 million which was primarily driven by the expansion of school zone speed programs. Speed is our largest product in this segment and grew $33.5 million in 2021 excluding Redflex. We added 805 speed cameras in 2020 which provided year-over-year growth in 2021 and 752 speed cameras in 2021 which provided growth in the 2021 and will continue to provide growth into 2022. The remaining growth can be attributable to improvement in variable rate programs that returned to more normalized volume as COVID-19 restrictions lifted throughout 2021.

Parking Solutions service revenue of $4.0 million resulted from the December 7, 2021 acquisition of T2 systems with no revenue in the comparable period.

Product Sales. Product sales increased slightly year over year and were $57.7 million and $57.3 million for fiscal years 2021 and 2020, respectively, which relate to revenue generated from Government Solutions and Parking Solutions customers who purchase their equipment. We generated product revenue of $8.1 million from the Redflex and T2 Systems acquisitions for which there was no revenue in the comparable period. Prior to these acquisitions, product revenue was limited to a few large customers whose buying patterns vary greatly from period to period. Product sales for these customers decreased by $7.7 million due to a decline of 60 units sold and to a lesser extent from product mix.

Cost of Service Revenue. Cost of service revenue increased from $4.0 million for fiscal year 2020 to $5.3 million for fiscal year 2021. The $1.3 million increase resulted from increased costs from third-party professional services associated with the delivery of certain ancillary services, a portion of which related to the Parking Solutions segment with no comparable costs in the prior year.

Cost of Product Sales. Cost of product sales increased slightly year over year and was $29.8 million and $29.6 million for fiscal years 2021 and 2020, respectively. This was mainly due to a decrease from the timing of installations at a single customer that is expanding its school zone speed program, offset by an increase from the inclusion of Redflex and T2 Systems product sales in the 2021 period with no comparable amounts in the prior year.

Operating Expenses. Operating expenses increased by $47.6 million, or 41.2%, from $115.7 million for fiscal year 2020 to $163.4 million in fiscal year 2021. The increase was primarily attributable to increases of $20.4 million in wages expense, $13.4 million for subcontractor expenses and $9.4 million of recurring services resulting from increased operations in 2021, which were lower in the 2020 year due to the impact from the COVID-19 pandemic. Operating expenses as a percentage of total revenue increased from 29.4% to 29.7% in fiscal years 2020 and 2021, respectively. This slight increase represents improved operating leverage corresponding to the revenue improvement in the Commercial Services segment and decreased operating leverage for the Government Solutions business with the addition of Redflex which historically had lower margins than the Verra Mobility business. The following table presents operating expenses by segment:

46

	Year Ended December 31,
					Percentage of Revenue						Increase (Decrease)  2021 vs 2020
($ in thousands)	2021		2020		2021			2020			$			%
Operating expenses
Commercial Services	$	65,718	$	52,505		12.0	%		13.3	%	$	13,213			25.2	%
Government Solutions		96,284		62,387		17.5	%		15.9	%		33,897			54.3	%
Parking Solutions		553		—		0.1	%		—			553		n/a
Total operating expenses before stock-based compensation		162,555		114,892		29.6	%		29.2	%		47,663			41.5	%
Stock-based compensation		815		837		0.1	%		0.2	%		(22	)		(2.6	)%
Total operating expenses	$	163,370	$	115,729		29.7	%		29.4	%	$	47,641			41.2	%

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $33.7 million to $123.4 million for fiscal year 2021 compared to $89.7 million for fiscal year 2020. The increase was primarily due to $12.4 million in transaction costs incurred related to the Redflex and T2 systems acquisitions, increased wages expense due to the reinstatement of employee bonus accrual in 2021, and increased wages, rent, information technology and other professional expenses from the inclusion of Redflex operations for approximately 200 days in 2021 with no comparable amounts in prior year. These increases were partially offset by a $4.9 million reduction to the credit loss expense resulting from changes in loss rate estimates based on improved economic conditions. Selling, general and administrative expenses as a percentage of total revenue decreased from 22.8% to 22.4% in fiscal years 2020 and 2021, respectively. The following table presents selling, general and administrative expenses by segment:
 

	Year Ended December 31,
					Percentage of Revenue						Increase (Decrease)  2021 vs 2020
($ in thousands)	2021		2020		2021			2020			$		%
Selling, general and administrative expenses
Commercial Services	$	42,386	$	40,462		7.7	%		10.3	%	$	1,924		4.8	%
Government Solutions		51,052		34,465		9.3	%		8.8	%		16,587		48.1	%
Parking Solutions		1,361		—		0.2	%		—			1,361	n/a
Corporate and other		15,639		2,985		2.8	%		0.7	%		12,654		423.9	%
Total selling, general and administrative expenses before stock-based compensation		110,438		77,912		20.0	%		19.8	%		32,526		41.7	%
Stock-based compensation		12,969		11,752		2.4	%		3.0	%		1,217		10.4	%
Total selling, general and administrative expenses	$	123,407	$	89,664		22.4	%		22.8	%	$	33,743		37.6	%

Depreciation, Amortization and (Gain) Loss on Disposal of Assets, Net. Depreciation, amortization and (gain) loss on disposal of assets, net, remained consistent at $116.8 million for both fiscal years 2021 and 2020. This was mainly due to a decrease from certain trademark intangibles being fully amortized for ten months in fiscal year 2021, offset by increased depreciation and amortization expense resulting from the Redflex and T2 Systems acquisitions in 2021 with no comparable amounts in the prior year.

Interest Expense, Net. Interest expense, net increased by $4.0 million from $40.9 million in fiscal year 2020 to $44.9 million in fiscal year 2021. This increase was primarily a result of the additional borrowing of $350 million in unsecured notes at a higher fixed rate, offset by the reduction in the variable rate on our first lien term loan facility. See “Liquidity and Capital Resources” below.

Change in Fair Value of Private Placement Warrants. We recorded losses of $7.6 million and $1.1 million in fiscal years 2021 and 2020, respectively, related to the changes in fair value of our Private Placement Warrants which are accounted for as liabilities on our consolidated balance sheets. The change in fair value is the result of re-measurement of the liability at the end of each reporting period.

47

Tax Receivable Agreement Liability Adjustment. We recorded a $1.0 million tax benefit in fiscal year 2021 and a $6.8 million tax expense in fiscal year 2020. The liability adjustment in 2021 was a result of lower estimated state tax rates due to changes in apportionment, whereas in 2020 it was a result of higher state tax rates due to changes in apportionment.

Loss on Extinguishment of Debt. Loss on extinguishment of debt was $5.3 million for fiscal year 2021 consisting of a $4.0 million write-off of pre-existing deferred financing costs and discounts and $1.3 million of lender and third-party costs associated with the issuance of the new 2021 Term Loan.

Other Income, Net. Other income, net was $12.9 million in fiscal year 2021 compared to $11.9 million in fiscal year 2020. The increase of $1.0 million was primarily due to increased tolling activity as a result of COVID-19 recovery in the travel industry, offset by a total of $2.8 million in gains recorded in fiscal year 2020 from a settlement agreement and related insurance proceeds.

Income Tax Provision. Income tax provision was $26.5 million representing an effective tax rate of 39.0% for fiscal year 2021 compared to $5.4 million, representing an effective tax rate of 636.7% for fiscal year 2020. The Company’s effective tax rate for 2021 was lower compared to 2020 primarily due to an increase in pretax income in 2021, resulting in the Company’s permanent book and tax differences having a proportionately lesser impact on the effective tax rate for 2021.

Net Income (Loss). We had net income of $41.4 million for fiscal year 2021 compared to a net loss of $4.6 million for 2020. The $46.0 million increase in net income was primarily due to the significant recovery in the travel industry positively impacting our RAC customers and from 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 (defined below).

We have incurred significant long-term debt as a result of acquisitions completed in prior years.

We believe that our existing cash and cash equivalents, cash flows provided by operating activities and our ability to borrow under our Revolver (as defined below) will be sufficient to meet operating cash requirements and service debt obligations for at least the next 12 months. 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. Should we pursue strategic acquisitions, we may need to raise additional capital, which may be in the form of additional long-term debt, borrowing 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. As of December 31, 2022, we had $74.8 million available for borrowing, net of letters of credit, under our Revolver.

Share Repurchases

In May 2022, our Board of Directors authorized a share repurchase program for up to an aggregate amount of $125.0 million of our outstanding shares of Class A Common Stock over a 12-month period in open market, ASR or privately negotiated transactions, each as permitted under applicable rules and regulations.

We subsequently paid $50.0 million in May 2022 to repurchase outstanding shares of our Class A Common Stock through an ASR, and received an initial delivery of 2,739,726 shares. The final settlement occurred in August 2022, at which time we received 445,086 additional shares. In addition, during the second and third quarters, we paid $6.9 million and repurchased 445,791 shares of our Class A Common Stock through open market transactions. Our Board of Directors authorized a second ASR during the third quarter of 2022 for the remaining availability under the

48

share repurchase program and we paid $68.1 million in August 2022 and received an initial delivery of 3,300,000 shares of our Class A Common Stock. The final settlement occurred in November 2022, at which time we received 943,361 additional shares.

In November 2022, 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 in open market, ASR or privately negotiated transactions, each as permitted under applicable rules and regulations. The Company has not yet repurchased shares under this repurchase program.

Concentration of Credit Risk

The City of New York Department of Transportation (“NYCDOT”) represented 22% and 39% of total accounts receivable, net as of December 31, 2022 and 2021, respectively. There is no material reserve related to NYCDOT open receivables as amounts are deemed collectible based on current conditions and expectations.

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

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
Net cash provided by operating activities	$	218,337		$	193,171		$	46,909
Net cash used in investing activities		(48,592	)		(475,970	)		(24,153	)
Net cash (used in) provided by financing activities		(164,932	)		268,722			(34,004	)

Cash Flows from Operating Activities

Cash provided by operating activities increased by $25.2 million, from $193.2 million in 2021 to $218.3 million in 2022. Net income increased $51.0 million from $41.4 million in 2021 compared to $92.5 million in 2022. The adjustments to net income included decreases of $37.1 million for the changes in the fair value of private placement warrants, (gain) loss on extinguishment of debt and changes in deferred income taxes year over year, partially offset by increases of $29.7 million from depreciation and amortization, credit loss expense, and stock-based compensation expense year over year. The aggregate changes in operating assets and liabilities decreased by $20.8 million in 2022 primarily due to increased accounts receivable balances mainly in the Commercial Services business.

Cash provided by operating activities in 2021 increased by $146.3 million, from $46.9 million in 2020 to $193.2 million in 2021. Net income increased $46.0 million from a $4.6 million loss in 2020 compared to $41.4 million income in 2021. The adjustments to net income (loss) included increases of $6.5 million for the changes in the fair value of private placement warrants year over year and $5.3 million loss on extinguishment of debt, partially offset by decreases from lower credit loss expense, changes in deferred income taxes and the tax receivable agreement liability adjustments year over year. Changes in operating assets and liabilities were mainly driven by a significant reduction in the accounts receivable balance from $182 million in payments received from NYCDOT in 2021, and increases in accounts payable and accrued liabilities resulting from increases in accrued interest at the end of 2021, reinstatement of the bonus accrual in 2021 and increased liabilities related to Redflex which were not in the comparable prior period.

Cash Flows from Investing Activities

Cash used in investing activities in 2022 and in 2020 was primarily related to purchases of installation and service parts and property and equipment. Cash used in investing activities in 2021 was mainly related to acquisitions of Redflex, T2 Systems and NuPark. We acquired one hundred percent of the outstanding equity of Redflex on June 17, 2021 at A$0.96 per share for total consideration of A$152.5 million, or approximately US$117.9 million. On December 7, 2021, we acquired all of the outstanding shares of T2 Systems for $353.2 million, net of $14.1 million of cash acquired. On December 13, 2021, we acquired NuPark for $7.0 million, which included approximately $5.0 million of cash paid.

Cash Flows from Financing Activities

Cash used in financing activities was $164.9 million in 2022 mainly due to the repurchases of approximately 7.9 million shares of the Company's Class A Common Stock for $125.1 million in the second and third quarters of

49

2022 as discussed further in Note 13, Stockholders' Equity, the repayment of $25.0 million of borrowing on the Revolver (defined below) in January 2022 and the quarterly principal payments on the 2021 Term Loan.

Cash provided by financing activities was $268.7 million in 2021. We had aggregate borrowings of $1.3 billion during 2021 consisting of the 2021 Term Loan (which included $250 million incremental borrowing), Senior Notes and the Revolver and repayments of $884.5 million on outstanding debt related to the 2018 and 2021 Term Loans, and debt assumed as part of the Redflex and T2 acquisitions that was subsequently paid. The 2018 Term Loan had been fully repaid in March 2021. The aggregate borrowings net of the repayments along with existing cash on hand were used to fund the close of the Redflex and T2 systems acquisitions in June 2021 and December 2021, respectively, and the share repurchase and retirement for $100 million in August 2021.

The cash used in financing activities in 2020 of $34.0 million was primarily due to the $19.7 million mandatory prepayment of excess cash flows made pursuant to the terms of the 2018 Term Loan and the quarterly principal payments on the 2018 Term Loan.

Long-term Debt

2021 Term Loan and Senior Notes

In March 2021, VM Consolidated, Inc., the Company’s wholly owned subsidiary (“VM Consolidated”), 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 $650.0 million, maturing on March 26, 2028, and an accordion feature providing for an additional $250.0 million of term loans, subject to satisfaction of certain requirements. In connection with the 2021 Term Loan, the Company had an offering discount cost of $3.3 million and $0.7 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan.

In addition, 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, the Company 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.

The net proceeds from both the 2021 Term Loan and the Senior Notes were used in March 2021 to repay in full all outstanding debt which was represented by the First Lien Term Loan Credit Agreement (as amended, the “2018 Term Loan”) with a balance of $865.6 million.

On December 7, 2021, VM Consolidated entered into an agreement to exercise the accordion feature under the 2021 Term Loan, borrowing $250.0 million in incremental term loans (“Incremental Term Loan”). The proceeds from the Incremental Term Loan were used, along with cash on hand, to fund the acquisition of T2 Systems, including repayment in full all outstanding debt for T2 Systems. In connection with the Incremental Term Loan, the Company had an offering discount cost of $1.3 million and $3.8 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan. The Incremental Term Loan accrued interest from the date of borrowing until December 31, 2021, at which time, it was combined with the 2021 Term Loan to be a single tranche of term loan borrowings. The total principal outstanding under the 2021 Term Loan, which includes the Incremental Term Loan, was $886.1 million at December 31, 2022.

The 2021 Term Loan is repayable at 1.0% per annum of the amount initially borrowed, paid in quarterly installments. It bears interest based, at the Company’s option, on either (1) LIBOR plus an applicable margin of 3.25% per annum, or (2) an alternate base rate plus an applicable margin of 2.25% per annum. As of December 31, 2022, the interest rate on the 2021 Term Loan was 7.6%.

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, beginning with the year ending December 31, 2022), as set forth in the following table:

50

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%

The Company will make a $12.9 million mandatory prepayment of excess cash flows during the first quarter of fiscal year 2023, which was classified as current portion of long-term debt in the consolidated balance sheet at December 31, 2022. We did not have a mandatory prepayment of excess cash flow for the fiscal year ended December 31, 2021.

Interest on the Senior Notes is fixed at 5.50% per annum and is payable on April 15 and October 15 of each year. On or after April 15, 2024, the Company 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
2024	102.750%
2025	101.375%
2026 and thereafter	100.000%

In addition, the Company may redeem up to 40% of the Senior Notes before April 15, 2024, with the net cash proceeds from certain equity offerings.

The Company evaluated the March 2021 refinancing transactions on a lender-by-lender basis and accounted for the portion of the transaction that did not meet the accounting criteria for debt extinguishment as a debt modification. Accordingly, the Company recognized a loss on extinguishment of debt of $5.3 million on the 2018 Term Loan during the year ended December 31, 2021, consisting of a $4.0 million write-off of pre-existing deferred financing costs and discounts and $1.3 million of lender and third-party costs associated with the issuance of the 2021 Term Loan.

PPP Loan

During fiscal year 2020, Redflex received a $2.9 million loan from the U.S. Small Business Administration (“SBA”) as part of the Paycheck Protection Program (“PPP Loan”) to offset certain employment and other allowable costs incurred as a result of the COVID-19 pandemic. In early 2021, Redflex applied for forgiveness of this loan, and on September 23, 2022, the Company was notified by the SBA that the loan, together with accrued interest, had been fully forgiven under the provisions of the PPP Loan program. Accordingly, the Company recognized a $3.0 million gain on extinguishment of debt in the consolidated statement of operations for the year ended December 31, 2022.

The Revolver

The Company has a Revolving Credit Agreement (the “Revolver”) with a commitment of up to $75.0 million available for loans and letters of credit. The Revolver matures on December 20, 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) LIBOR plus an applicable margin, or (2) an alternate base rate, plus an applicable margin. The margin percentage applied to (1) LIBOR 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 the Company’s average availability to borrow under the commitment. At December 31, 2021, the Company had $25.0 million in outstanding borrowings on the Revolver, which was repaid in full in January 2022. At December 31, 2022, the availability to borrow was $74.8 million, net of $0.2 million of outstanding letters of credit.

Interest on the unused portion of the Revolver is payable quarterly at 0.375% and the Company is also required to pay participation and fronting fees at 1.38% on $0.2 million of outstanding letters of credit as of December 31, 2022.

51

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 the Company’s assets are pledged as collateral to secure the Company’s indebtedness under the 2021 Term Loan. At December 31, 2022, the Company was compliant with all debt covenants.

Interest Expense

The Company recorded interest expense, including amortization of deferred financing costs and discounts, of $69.4 million, $44.9 million and $40.9 million for the fiscal years ended December 31, 2022, 2021 and 2020 respectively.

See Note 2, Significant Accounting Policies, in Item 8, Financial Statements and Supplementary Data for additional information on the interest rate swap entered into in December 2022 to hedge our exposure against rising interest rates.

Critical Accounting Policies

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that its estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.

Our significant accounting policies are described in Note 2, Significant Accounting Policies, in Item 8, Financial Statements and Supplementary Data, of this Annual Report. We believe that the critical accounting policies listed below involve our more significant judgments, assumptions, and estimates and, therefore, could have the greatest potential impact on the financial statements.

Revenue Recognition

Judgment is required for the estimation of the standalone selling price ("SSP") and the allocation of the transaction price by relative SSPs. Within our Government Solutions and Parking Solutions operating segments, some customer arrangements include multiple performance obligations. Government Solutions’ customer arrangements containing multiple performance obligations typically include the sale and installation of photo-enforcement cameras and the performance of maintenance services on such cameras over a contractual term. Parking Solutions’ customer arrangements containing multiple performance obligations typically include the sale and installation of parking access hardware systems, the licensing of SaaS products and/or the performance of maintenance services over a contractual term. In most instances, we have determined these performance obligations qualify as distinct performance obligations, as the customer can benefit from the service on its own or together with other resources that are readily available to the customer, and our promise to transfer the service is separately identifiable from other promises in the contract. For arrangements that contain multiple performance obligations, we exercise judgement in allocating the transaction price based on the relative SSP method by comparing the SSP of each distinct performance obligation to the total value of the contract. We determine the SSP based on our historical pricing and discounting practices for the distinct performance obligation when sold separately. If the SSP is not directly observable, we estimate the SSP by considering information such as market conditions and information about the customer.

Allowance for Credit Losses

We review historical credit losses and customer payment trends on receivables and develop loss rate estimates as of the balance sheet date, which includes adjustments for current and future expectations using probability-weighted assumptions about potential outcomes. Receivables are written off against the allowance for credit losses when it is probable that amounts will not be collected based on the terms of the customer contracts, and subsequent recoveries reverse the previous write-off and apply to the receivable in the period recovered. The Company periodically evaluates the adequacy of its allowance for expected credit losses by comparing its actual historical write-offs to its previously

52

recorded estimates and adjusts appropriately. This includes evaluation by portfolio segment the changes in expectations based on the newest information available on customer payment trends and risk characteristics, and adjusting the probability-weighting either upward or downward that is most representative of the expected credit losses.

Acquisitions

We apply the acquisition method to account for business combinations. We allocate the fair value of the purchase price consideration to assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair value of the identifiable assets and liabilities is recorded as goodwill.

The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment and includes the use of independent valuation specialists to assist us in estimating fair values of acquired tangible and intangible assets. Fair values of acquired assets and their respective useful lives are based on, among other factors, critical estimates of expected cash flows, customer turnover and anticipated growth from acquired customers, discount rates and royalty cost savings. Although we believe that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from estimates. Differences between estimates and actual results may result in adjustment to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to fair values of assets and liabilities made after the end of the measurement period are recognized within our consolidated statements of operations as a current period gain or loss.

Impairment of Goodwill and Long-Lived Assets

We assess goodwill for impairment annually on October 1, or more frequently if events or circumstances indicate that the carrying amounts may not be fully recoverable. We first consider the option to assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value is less than the carrying amount, we then perform a one-step quantitative impairment test by comparing the reporting unit’s fair value with its carrying value. An impairment loss is recognized for the amount by which the reporting units’ carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. No impairment is recognized if the fair value of the reporting unit exceeds its carrying value.

The process of evaluating goodwill requires significant judgment including the identification of reporting units and the determination of the fair value of each reporting unit. If necessary, we determine fair values of our reporting units based on an income approach or more specifically, a discounted cash flow method (“DCF Method”). The DCF Method is based on projected future cash flows and terminal value estimates discounted to their present values. Terminal value represents the present value an investor would pay on the valuation date for the rights to the cash flows of the business for the years subsequent to the discrete cash flow projection period. We consider the DCF Method to be the most appropriate valuation technique since it is based on our long-term financial projections. In addition to determining the fair value of our reporting units based on the DCF method, we also compare the aggregate values of our net corporate assets and the reporting unit fair values to our overall market capitalization and use certain market-based valuation techniques to assess the reasonableness of the reporting unit fair values determined in accordance with the DCF Method. The key inputs used in the DCF Method include revenue growth rates, gross margin percentage, selling, general and administrative expense percentage, terminal growth rates and discount rates that are at or above our weighted-average cost of capital. We apply discount rates that are commensurate with the risks and uncertainties inherent in the respective reporting units and our internally developed projections of future cash flows.

In connection with our 2022 assessment of goodwill impairment, we qualitatively concluded that our Commercial Services and Government Solutions North America reporting units did not have indicators of impairment. We did however perform quantitative impairment reviews on our Parking Solutions and Government Solutions International reporting units, both of which were acquired in 2021. The fair values of these reporting units were determined in accordance with the DCF Method described above using currently available financial forecasts. Based on the results of our quantitative review, we concluded no adjustment to goodwill was necessary because the estimated fair values exceeded their reporting unit carrying values and the fair values were consistent with the operating values

53

estimated in 2021 as part of the respective purchase price allocations. Moreover, we utilized earnings multiples to estimate the fair values of our Commercial Services and Government Solutions reporting units and corroborated the reasonableness of the reporting unit fair values by reconciling to the Company’s market capitalization as of October 1, 2022. Our qualitative analyses performed as of October 1 for fiscal years 2021 and 2020 did not have indicators of impairment.

We review our long-lived assets other than goodwill for impairment whenever events or circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. We assess recoverability by comparing the estimated undiscounted future cash flows expected to be generated by the asset or asset group with its carrying value. If the carrying value of the asset or asset group exceeds the estimated undiscounted future cash flows, an impairment loss is recognized for the difference between the estimated fair value and the carrying value. Our estimates of cash flows are subjective judgments based on past experiences adjusted for trends and future expectations, and can be significantly impacted by changes in our business or economic conditions. The determination of asset group' fair value is also subject to significant judgment and utilizes valuation techniques including discounting estimated future cash flows and market-based analyses. If our estimates or underlying assumptions change in the future, our operating results may be materially impacted. We did not have any indicators of impairment related to long-lived assets for the years ended December 31, 2021 or 2020. We recorded $0.7 million of impairment related to certain photo enforcement programs that ended during the year ended December 31, 2022 within the depreciation, amortization and (gain) loss on disposal of assets, net line item on the consolidated statements of operations.

Income Taxes

We account for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the financial statements. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax return in future years, while deferred tax liabilities generally represent items that generate a future tax liability for items where deductions have been accelerated for tax purposes. We provide a valuation allowance for deferred tax assets if it is more likely than not that some portion or all of the tax assets will not be realized. We calculate the valuation allowance in accordance with the authoritative guidance relating to income taxes, which requires an assessment of both positive and negative evidence regarding the realizability of these deferred tax assets when measuring the need for a valuation allowance. Significant judgment is required in determining any valuation allowance against deferred tax assets. The realization of deferred tax assets can be affected by, among other things, the nature, frequency, and severity of current and cumulative losses, forecasts of future profitability, the length of statutory carryforward periods, our experience with utilizing operating losses and tax credit carryforwards by jurisdiction, the reversal of existing taxable temporary differences and tax planning alternatives and strategies that may be available.

Our effective tax rate is based on income, statutory tax rates, differences in the deductibility of certain expenses and inclusion of certain income items between financial statement and tax return purposes, and tax planning opportunities available to us in the various jurisdictions in which we operate. Under GAAP, if we determine that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, we recognize the benefit. Tax code and regulations require certain items to be included in the tax return at different times than when those items are required to be recorded in the consolidated financial statements. As a result, our effective tax rate reflected in our consolidated financial statements is different from that reported in our tax returns. Some of these differences are permanent, such as meals and entertainment expenses that are not fully deductible on our tax returns, and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities.

Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax provision or benefit.

Private Placement Warrant Liabilities

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. For warrants that meet all of the criteria for equity

54

classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. Our Public Warrants meet the criteria for equity classification and accordingly, are reported as a component of shareholders’ equity while our Private Placement Warrants do not meet the criteria for equity classification and are instead classified as a liability. The fair value of the Private Placement Warrants is estimated at period-end using a Black-Scholes option pricing model, which is a Level 3 fair value measurement exposed to valuation risk. The risk of exposure is estimated using a sensitivity analysis of potential changes in the significant unobservable inputs, primarily the volatility input that is the most susceptible to valuation risk. A 5% increase to the volatility input at December 31, 2022 would increase the estimated fair value of $3.61 by $0.19 per unit. A 5% decrease to the volatility input at December 31, 2022 would decrease the estimated fair value by $0.18 per unit.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, refer to Note 2, Significant Accounting Policies, in Item 8, Financial Statements and Supplementary Data.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to interest rate market risk due to the variable interest rate on the 2021 Term Loan described in “Item 7. 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 $886.1 million at December 31, 2022. The 2021 Term Loan presently bears interest based, at our option, on either (1) LIBOR plus an applicable margin of 3.25% per annum, or (2) an alternate base rate plus an applicable margin of 2.25% per annum. At December 31, 2022, the interest rate on the 2021 Term Loan was 7.6%. Based on the December 31, 2022 balance outstanding, each 1% movement in interest rates will result in an approximately $8.9 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 portion of the variable interest rate on our 2021 Term Loan. Under the interest rate swap agreement, we pay a fixed rate and the counterparty pays a variable interest rate which is net settled. The notional amount on the interest rate swap is $675 million. We have the option to terminate the interest rate swap agreement starting in December 2023, and monthly thereafter until December 2025, in the event interest rates decrease. We recorded a $1.0 million gain on interest rate swap for the year ended December 31, 2022. See Note 2, Significant Accounting Policies, in Item 8, Financial Statements and Supplementary Data for additional information on the interest rate swap.

55

VERRA MOBILITY CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Item 8. Financial Statements and Supplementary Data

	Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)	57
Consolidated Balance Sheets	61
Consolidated Statements of Operations and Comprehensive Income (Loss)	62
Consolidated Statements of Stockholders’ Equity	63
Consolidated Statements of Cash Flows	64
Notes to Consolidated Financial Statements	66

56

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Verra Mobility Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Verra Mobility Corporation (the Company) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Commercial Services Revenue

Description of the Matter As described in Notes 2 and 18 to the consolidated financial statements, the Company generated commercial services revenue of $326.0 million for the year ended December 31, 2022.   The Company’s commercial services revenue recognition process involves several applications and data sources needed for the initiation, processing, and recording of transactions from the Company’s various commercial services revenue sources, as well as the calculation of commercial

57

services revenue in accordance with the Company’s accounting policy. Auditing the Company's accounting for commercial services revenue from contracts with customers was challenging and complex primarily due to the high volume of transactions, as well as the multiple applications and data sources associated with the commercial services revenue recognition process.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the commercial services revenue recognition process. This included testing controls over the completeness and accuracy of data within the commercial services revenue systems, the interfaces of data between relevant systems, testing of relevant IT application controls and testing of relevant IT general controls over the IT applications supporting the commercial services revenue recognition process. To test the Company’s accounting for commercial services revenue from contracts with customers, we performed substantive audit procedures that included, among others, testing on a sample basis the completeness and accuracy of the underlying data within the commercial services revenue systems, performing data analytics to test recorded revenue amounts, tracing a sample of sales transactions to supporting documentation, and testing a sample of cash to billings reconciliations.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2013.

Phoenix, Arizona

March 1, 2023

58

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Verra Mobility Corporation

Opinion on Internal Control over Financial Reporting

We have audited Verra Mobility Corporation’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Verra Mobility Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15(a) and our report dated March 1, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

59

Phoenix, Arizona

March 1, 2023

60

VERRA MOBILITY CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)	December 31, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	105,204		$	101,283
Restricted cash		3,911			3,149
Accounts receivable (net of allowance for credit losses of $15.9 million and $12.1 million at December 31, 2022 and 2021, respectively)		163,786			160,979
Unbilled receivables		30,782			29,109
Inventory		19,307			12,093
Prepaid expenses and other current assets		39,604			41,456
Total current assets		362,594			348,069
Installation and service parts, net		22,923			13,332
Property and equipment, net		109,775			96,066
Operating lease assets		37,593			38,862
Intangible assets, net		377,420			487,299
Goodwill		833,480			838,867
Other non-current assets		12,484			14,561
Total assets	$	1,756,269		$	1,837,056
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	79,869		$	67,556
Deferred revenue		31,164			27,141
Accrued liabilities		48,847			38,435
Tax receivable agreement liability, current portion		4,994			5,107
Current portion of long-term debt		21,935			36,952
Total current liabilities		186,809			175,191
Long-term debt, net of current portion		1,190,045			1,206,802
Operating lease liabilities, net of current portion		33,362			34,984
Tax receivable agreement liability, net of current portion		50,900			56,615
Private placement warrant liabilities		24,066			38,466
Asset retirement obligations		12,993			11,824
Deferred tax liabilities, net		21,149			47,524
Other long-term liabilities		5,875			5,686
Total liabilities		1,525,199			1,577,092
Commitments and contingencies (Note 17)
Stockholders' equity
Preferred stock, $0.0001 par value, 1,000 shares authorized with no shares issued and outstanding at December 31, 2022 and 2021		—			—
Common stock, $0.0001 par value, 260,000 shares authorized with 148,962 and 156,079 shares issued and outstanding at December 31, 2022 and 2021, respectively		15			16
Common stock contingent consideration		36,575			36,575
Additional paid-in capital		305,423			309,883
Accumulated deficit		(98,078	)		(81,416	)
Accumulated other comprehensive loss		(12,865	)		(5,094	)
Total stockholders' equity		231,070			259,964
Total liabilities and stockholders' equity	$	1,756,269		$	1,837,056

See accompanying Notes to Consolidated Financial Statements.

61

VERRA MOBILITY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

	For the Year Ended December 31,
($ in thousands, except per share data)	2022			2021			2020
Service revenue	$	695,218		$	492,846		$	336,274
Product sales		46,380			57,744			57,319
Total revenue		741,598			550,590			393,593
Cost of service revenue		16,330			5,337			3,967
Cost of product sales		30,932			29,809			29,573
Operating expenses		226,324			163,370			115,729
Selling, general and administrative expenses		163,133			123,407			89,664
Depreciation, amortization and (gain) loss on disposal of assets, net		140,174			116,801			116,844
Total costs and expenses		576,893			438,724			355,777
Income from operations		164,705			111,866			37,816
Interest expense, net		69,372			44,942			40,865
Change in fair value of private placement warrants		(14,400	)		7,600			1,133
Tax receivable agreement liability adjustment		(720	)		(1,016	)		6,850
Gain on interest rate swap		(996	)		—			—
(Gain) loss on extinguishment of debt		(3,005	)		5,334			—
Other income, net		(12,654	)		(12,895	)		(11,885	)
Total other expenses		37,597			43,965			36,963
Income before income taxes		127,108			67,901			853
Income tax provision		34,633			26,452			5,431
Net income (loss)	$	92,475		$	41,449		$	(4,578	)
Other comprehensive (loss) income:
Change in foreign currency translation adjustment		(7,771	)		(5,305	)		2,788
Total comprehensive income (loss)	$	84,704		$	36,144		$	(1,790	)
Net income (loss) per share:
Basic	$	0.61		$	0.26		$	(0.03	)
Diluted	$	0.50		$	0.25		$	(0.03	)
Weighted average shares outstanding:
Basic		152,848			159,983			161,632
Diluted		159,026			163,778			161,632

See accompanying Notes to Consolidated Financial Statements.

62

VERRA MOBILITY CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Common Stock						Common Stock Contingent			Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
(In thousands)	Shares			Amount			Consideration			Capital			Deficit			(Loss) Income			Equity
Balance as of December 31, 2019		159,150		$	16		$	54,862		$	346,891		$	(89,578	)	$	(2,577	)	$	309,614
Net loss		—			—			—			—			(4,578	)		—			(4,578	)
Cumulative effect of adoption of the credit loss accounting standard, net of tax		—			—			—			—			(694	)		—			(694	)
Earn-out shares issued to Platinum Stockholder		2,500			—			(18,287	)		18,287			—			—			—
Vesting of restricted stock units ("RSUs")		619			—			—			—			—			—			—
Payment of employee tax withholding related to RSUs vesting		—			—			—			(4,147	)		—			—			(4,147	)
Stock-based compensation		—			—			—			12,589			—			—			12,589
Other comprehensive income, net of tax		—			—			—			—			—			2,788			2,788
Balance as of December 31, 2020		162,269		$	16		$	36,575		$	373,620		$	(94,850	)	$	211		$	315,572
Net income		—			—			—			—			41,449			—			41,449
Share repurchases and retirement		(6,849	)		—			—			(71,985	)		(28,015	)		—			(100,000	)
Vesting of RSUs		647			—			—			—			—			—			—
Exercise of stock options		12			—			—			155			—			—			155
Payment of employee tax withholding related to RSUs vesting		—			—			—			(5,691	)		—			—			(5,691	)
Stock-based compensation		—			—			—			13,784			—			—			13,784
Other comprehensive loss, net of tax		—			—			—			—			—			(5,305	)		(5,305	)
Balance as of December 31, 2021		156,079		$	16		$	36,575		$	309,883		$	(81,416	)	$	(5,094	)	$	259,964
Net income		—			—			—			—			92,475			—			92,475
Share repurchases and retirement		(7,874	)		(1	)		—			(15,933	)		(109,137	)		—			(125,071	)
Vesting of RSUs		654			—			—			—			—			—			—
Exercise of stock options		103			—			—			1,334			—			—			1,334
Payment of employee tax withholding related to RSUs vesting		—			—			—			(6,524	)		—			—			(6,524	)
Stock-based compensation		—			—			—			16,663			—			—			16,663
Other comprehensive loss, net of tax		—			—			—			—			—			(7,771	)		(7,771	)
Balance as of December 31, 2022		148,962		$	15		$	36,575		$	305,423		$	(98,078	)	$	(12,865	)	$	231,070

See accompanying Notes to Consolidated Financial Statements.

63

VERRA MOBILITY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
Cash Flows from Operating Activities:
Net income (loss)	$	92,475		$	41,449		$	(4,578	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		138,684			116,753			116,570
Amortization of deferred financing costs and discounts		5,472			5,170			5,437
Change in fair value of private placement warrants		(14,400	)		7,600			1,133
Tax receivable agreement liability adjustment		(720	)		(1,016	)		6,850
Gain on interest rate swap		(996	)		—			—
(Gain) loss on extinguishment of debt		(3,005	)		5,334			—
Credit loss expense		14,481			9,588			14,391
Deferred income taxes		(17,355	)		(10,640	)		(4,746	)
Stock-based compensation		16,663			13,784			12,589
Impairment on a privately-held equity investment		1,340			—			—
Other		1,654			308			1,210
Changes in operating assets and liabilities:
Accounts receivable		(17,685	)		14,946			(90,592	)
Unbilled receivables		(1,936	)		(7,753	)		5,964
Inventory		(10,310	)		2,798			—
Prepaid expenses and other assets		4,306			(5,097	)		3,829
Deferred revenue		4,591			(3,966	)		58
Accounts payable and other current liabilities		6,513			8,296			(16,925	)
Other liabilities		(1,435	)		(4,383	)		(4,281	)
Net cash provided by operating activities		218,337			193,171			46,909
Cash Flows from Investing Activities:
Acquisitions, net of cash and restricted cash acquired		—			(451,237	)		—
Payment of contingent consideration		(647	)		—			—
Purchases of installation and service parts and property and equipment		(48,186	)		(24,998	)		(24,260	)
Cash proceeds from the sale of assets		241			265			107
Net cash used in investing activities		(48,592	)		(475,970	)		(24,153	)
Cash Flows from Financing Activities:
Borrowings on revolver		—			25,000			—
Repayment on revolver		(25,000	)		—			—
Borrowings of long-term debt		—			1,245,500			—
Repayment of long-term debt		(9,019	)		(884,530	)		(28,779	)
Payment of debt issuance costs		(447	)		(10,646	)		(1,078	)
Payment of debt extinguishment costs		—			(1,066	)		—
Share repurchases and retirement		(125,071	)		(100,000	)		—
Proceeds from exercise of stock options		1,334			155			—
Payment of employee tax withholding related to RSUs vesting		(6,524	)		(5,691	)		(4,147	)
Payment of contingent consideration		(205	)		—			—
Net cash (used in) provided by financing activities		(164,932	)		268,722			(34,004	)
Effect of exchange rate changes on cash and cash equivalents		(130	)		(2,383	)		(290	)
Net increase (decrease) in cash, cash equivalents and restricted cash		4,683			(16,460	)		(11,538	)
Cash, cash equivalents and restricted cash - beginning of period		104,432			120,892			132,430
Cash, cash equivalents and restricted cash - end of period	$	109,115		$	104,432		$	120,892

See accompanying Notes to Consolidated Financial Statements.

64

VERRA MOBILITY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

	For the Year Ended December 31,
	2022		2021		2020
Supplemental cash flow information:
Interest paid	$	63,663	$	35,786	$	35,822
Income taxes paid, net of refunds		47,623		35,774		12,638
Supplemental non-cash investing and financing activities:
Earn-out shares issued to Platinum Stockholder		—		—		18,287
Additions related to asset retirement obligations and property and equipment(a)		946		1,397		133
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		10,421		1,714		1,289
Contingent consideration related to NuPark acquisition		—		1,450		—

(a) Asset retirement obligations of $3.9 million assumed as part of the Redflex acquisition in 2021 are excluded from these additions.

See accompanying Notes to Consolidated Financial Statements.

65

VERRA MOBILITY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.Description of Business

Verra Mobility Corporation (collectively with its subsidiaries, the “Company” or “Verra Mobility”), formerly known as Gores Holdings II, Inc. (“Gores”), was originally incorporated in Delaware on August 15, 2016, as a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses. On January 19, 2017, the Company consummated its initial public offering (the “IPO”), following which its shares began trading on the Nasdaq Capital Market (“Nasdaq”). On June 21, 2018, Gores entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Greenlight Holding II Corporation (“Greenlight”), PE Greenlight Holdings, LLC (the “Platinum Stockholder”), AM Merger Sub I, Inc., a direct, wholly owned subsidiary of Gores and AM Merger Sub II, LLC, a direct, wholly owned subsidiary of Gores. On October 17, 2018, the transactions contemplated by the Merger Agreement (the “Business Combination”) were consummated. In connection with the closing of the Business Combination, Gores changed its name to Verra Mobility Corporation. As a result of the Business Combination, Verra Mobility Corporation became the owner, directly or indirectly, of all of the equity interests of Verra Mobility Holdings, LLC and its subsidiaries.

Verra Mobility offers integrated technology solutions and services to its customers who are located throughout the world, primarily within the United States, Australia, Canada and Europe. The Company is organized into three operating segments: Commercial Services, Government Solutions and Parking Solutions (see Note 18. Segment Reporting).

The Commercial Services segment offers toll and violation management solutions for the commercial fleet and rental car industries by partnering with the leading fleet management and rental car companies in North America. Electronic toll payment services enable fleet drivers and rental car customers to use high-speed cashless toll lanes or all-electronic cashless toll roads. The service helps commercial fleets reduce toll management costs, while it provides rental car companies with a revenue-generating, value-added service for their customers. Electronic violation processing services reduce the cost and risk associated with vehicle-issued violations, such as toll, parking or camera-enforced tickets. Title and registration services offer title and registration processing for individuals, rental car companies and fleet management companies. In Europe, the Company provides violations processing through Euro Parking Collection plc and consumer tolling services through Pagatelia S.L.U.

The Government Solutions segment offers photo enforcement solutions and services to its customers. Through its acquisition of Redflex Holdings Limited (“Redflex”) in June 2021, the Company expanded its current footprint in the United States and gained access to international markets (see Note 3. Acquisitions). The Government Solutions segment provides complete, end-to-end speed, red-light, school bus stop arm and bus lane enforcement solutions within the United States and Canada. These programs are designed to reduce traffic violations and resulting collisions, injuries, and fatalities. The Company implements and administers traffic safety programs for municipalities, counties, school districts and law enforcement agencies of all sizes. The international operations acquired through Redflex primarily involve the sale or license of traffic enforcement products and related maintenance services.

The Parking Solutions segment offers an integrated suite of parking software and hardware solutions to its customers which include universities, municipalities, parking operators, healthcare facilities and transportation hubs. The Company added this operating segment as a result of the acquisition of T2 Systems Parent Corporation (“T2 Systems”) in December 2021, which allows the Company to diversify its operations into the parking solutions space (see Note 3. Acquisitions). The Parking Solutions segment develops specialized hardware and parking management software that provides a platform for the issuance of parking permits, enforcement, gateless vehicle counting, event parking and citation services. T2 Systems also produces and markets its proprietary software as a service to its customers throughout the United States and Canada.

2.Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All

66

intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions include those related to the fair values assigned to net assets acquired (including identifiable intangibles) in business combinations, allocating the transaction price for revenue recognition, inventory valuation, allowance for credit losses, fair value of the private placement warrant liabilities, fair value of the interest rate swap, self insurance liability, valuation allowance on deferred tax assets, uncertain tax positions, apportionment for state income taxes, the tax receivable agreement liability, fair value of privately-held securities, impairment assessments of goodwill, intangible assets and other long-lived assets, asset retirement obligations, contingent consideration and the recognition and measurement of loss contingencies.

Management believes that its estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less when acquired to be cash equivalents.

Restricted Cash

The Company collects cash on behalf of customers under certain contracts which it deposits daily into Company bank accounts and transfers regularly to customer bank accounts. Restricted cash represents customer cash collected but not yet remitted to the customer. Restricted cash is classified as a current asset and the corresponding liability is classified in current liabilities.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, accounts receivable and unbilled receivables. The Company limits cash and cash equivalents to highly rated financial institutions.

Significant customers are those which represent more than 10% of the Company’s total revenue or accounts receivable, net. Revenue from the single Government Solutions customer exceeding 10% of total revenue is presented below:

	For the Year Ended December 31,
	2022			2021			2020
City of New York Department of Transportation		19.5	%		26.6	%		31.3	%

The City of New York Department of Transportation (“NYCDOT”) represented 22% and 39% of total accounts receivable, net as of December 31, 2022 and 2021, respectively. There is no material reserve related to NYCDOT open receivables as amounts are deemed collectible based on current conditions and expectations. No other Government Solutions customer exceeded 10% of total accounts receivable, net as of any period presented.

Significant customer revenue concentrations generated through the Company’s Commercial Services partners as a percent of total revenue are presented below:

67

	For the Year Ended December 31,
	2022			2021			2020
Hertz Corporation		11.1	%		12.6	%		12.0	%
Avis Budget Group, Inc.		13.0	%		12.3	%		9.5	%
Enterprise Holdings, Inc.		9.3	%		11.4	%		11.3	%

The Avis Budget Group, Inc. was 10.2% of total accounts receivable, net as of December 31, 2022. No other Commercial Services customer exceeded 10% of total accounts receivable, net as of any period presented.

There were no significant customer concentrations that exceeded 10% of total revenue or accounts receivables, net for the Parking Solutions segment.

Allowance for Credit Losses

Accounts receivable and unbilled receivables are uncollateralized customer obligations arising from the sale of products or services. Accounts receivable and unbilled receivables have normal trade terms of less than one year and are initially stated at the amounts billed to the customers and subsequently measured at amortized cost net of allowance for credit losses. Unbilled receivables are recorded when revenues have been earned but have not been included on a customer invoice through the end of the current period.

The Company reviews historical credit losses and customer payment trends on receivables and develops loss rate estimates as of the balance sheet date, which includes adjustments for current and future expectations using probability-weighted assumptions about potential outcomes. Receivables are written off against the allowance for credit losses when it is probable that amounts will not be collected based on the terms of the customer contracts, and subsequent recoveries reverse the previous write-off and apply to the receivable in the period recovered. No interest or late fees are charged on delinquent accounts. The Company evaluates the adequacy of its allowance for expected credit losses by comparing its actual write-offs to its previously recorded estimates and adjusts appropriately.

The Company identified portfolio segments based on the type of business, industry in which the customer operates and historical credit loss patterns. The following presents the activity in the allowance for credit losses for the years ended December 31, 2021 and 2022, respectively:

($ in thousands)	Commercial Services (Driver-billed) (1)			Commercial Services (All other)			Government Solutions			Parking Solutions			Total
Balance at January 1, 2021	$	3,210		$	4,277		$	3,984		$	—		$	11,471
Credit loss expense (income)		11,040			(1,138	)		(314	)		—			9,588
Write-offs, net of recoveries		(8,853	)		(47	)		(21	)		—			(8,921	)
Balance at December 31, 2021	$	5,397		$	3,092		$	3,649		$	—		$	12,138
Credit loss expense		11,739			1,307			950		485				14,481
Write-offs, net of recoveries		(7,536	)		(2,822	)		(26	)		(328	)		(10,712	)
Balance at December 31, 2022	$	9,600		$	1,577		$	4,573		$	157		$	15,907

(1)Driver-billed consists of receivables from drivers of rental cars and fleet management companies for which the Company bills on behalf of its customers. Receivables not collected from drivers within a defined number of days are transferred to customers subject to applicable bad debt sharing agreements.

The Commercial Services (Driver-billed) portfolio segment’s credit loss estimate as of December 31, 2021 and 2022 increased compared to the prior years due to increased revenue that impacted the volume of transactions as a result of recovery from COVID-19. The Company adjusted down its estimate for credit loss as of December 31, 2021 for the Commercial Services (All other) portfolio segment to reflect improved economic conditions based on customer payment trends from the preceding twelve months. The credit loss estimate for this portfolio segment decreased as of December 31, 2022 mainly due to a $1.7 million write-off for a rental car customer who filed for bankruptcy.

68

Inventory

Inventories consist of parts and electronic components used in the production of parking management related hardware sold to certain Parking Solutions customers and photo enforcement equipment sold to certain Government Solutions customers. Inventories are stated at cost on a first-in, first-out basis or net realizable value. The Company assesses the value of its inventory and writes down the cost to net realizable value upon evaluation of historical experience and assumptions regarding future usage, and any such write down establishes a new cost basis for the items. Finished goods were approximately $5.1 million and $2.5 million as of December 31, 2022 and 2021, respectively.

Installation and Service Parts

Installation and service parts consist of components used in the construction and maintenance of our photo enforcement systems. Installation and service parts are stated at cost and are reclassified to property and equipment upon initiation of construction. Installation and service parts used in repairs and maintenance are recorded as operating expenses.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. All repairs and maintenance costs are expensed as incurred. Depreciation is recorded on a straight-line basis over the estimated useful lives of the related assets as follows:

Equipment installed at customer sites	3-7 years
Computer equipment	3-5 years
Furniture	3-10 years
Automobiles	3-7 years
Software	3-7 years
Leasehold improvements	Shorter of lease term or estimated useful life

Equipment installed at customer sites includes certain installation costs that qualify for capitalization. Software costs include certain internal and external costs associated with the development of software that are incurred during the application development stage. In addition, a modification or upgrade to existing software is capitalized only to the extent it results in additional functionality to existing software. Software maintenance and training costs are expensed as incurred. The Company capitalized internally developed software costs of $7.5 million, $3.0 million and $5.1 million during fiscal years 2022, 2021, and 2020 respectively.

Investment in Privately-held Securities

The Company holds an investment in privately-held equity securities which is recorded at cost and adjusted based on observable transactions for same or similar investments or for impairment. Investment gains and losses are recorded in other income, net.

Valuation of privately-held securities requires judgment due to the lack of readily available observable market data. The carrying value is not adjusted if there are no identified events that would indicate a need for upward or downward adjustments or changes in circumstances that may indicate impairment. In determining the estimated fair value of its investment, the Company utilizes the most recent data available. The Company assesses it investment for impairment quarterly using both qualitative and quantitative factors. If an investment is considered impaired, an impairment loss is recognized and a new carrying value is established for the investment.

The Company considered the existence of impairment indicators by evaluating the financial and liquidity position and as a result, a $1.3 million impairment during the year ended December 31, 2022 was recorded within other income, net on the consolidated statements of operations. There were no indicators of impairment during the year ended December 31, 2021. See Note 16, Other Significant Transactions for more information.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. Goodwill is assessed for impairment at least annually at the reporting unit level or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable. If, based on a qualitative analysis, it is determined more-likely-than-not that the fair value of the reporting

69

unit is less than its carrying amount, a one-step quantitative impairment test is performed. Reporting units are identified by assessing whether the components of the Company’s operating segments constitute businesses for which discrete financial information is available and if segment management regularly reviews the operating results of those components. Application of the goodwill impairment test requires judgment, including the identification of reporting units, the assignment of assets (including goodwill) to those reporting units and the determination of the fair value of each reporting unit. The date of the Company’s annual impairment analysis is October 1. The Company has four reporting units for the purposes of assessing potential impairment of goodwill.

In connection with the Company's 2022 assessment of goodwill impairment, it qualitatively concluded that the Commercial Services and Government Solutions North America reporting units did not have indicators of impairment. It did however, perform quantitative impairment reviews on the Parking Solutions and Government Solutions International reporting units, both of which were acquired in 2021. The fair values of these reporting units were determined in accordance with the discounted cash flow method using currently available financial forecasts. Based on the results of the Company's quantitative review, it concluded no adjustment to goodwill was necessary for fiscal year 2022. Moreover, the Company utilized earnings multiples to estimate the fair values of its Commercial Services and Government Solutions reporting units and corroborated the reasonableness of the reporting unit fair values by reconciling to the Company’s market capitalization as of October 1, 2022. The qualitative analyses performed as of October 1 for fiscal years 2021 and 2020 did not have indicators of impairment.

Intangible Assets

Intangible assets represent existing customer relationships, trademarks, developed technology (hardware and software) and non-compete agreements. Intangible assets are amortized over their respective estimated useful lives on a straight-line basis, which approximates the utilization of their expected future benefits. Amortization of intangible assets is included in depreciation, amortization and (gain) loss on disposal of assets, net in the consolidated statements of operations.

The Company annually evaluates the estimated remaining useful lives of its intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets (including intangible assets with finite useful lives and installation and service parts) for impairment whenever events or circumstances indicate that the carrying amount of an asset or an asset group may not be fully recoverable. The Company assesses recoverability by comparing the estimated undiscounted future cash flows expected to be generated by the asset or asset group with its carrying value. If the carrying value of the asset or asset group exceeds the estimated undiscounted future cash flows, an impairment loss is recognized for the difference between the estimated fair value and the carrying value.

The Company did not have any indicators of impairment related to long-lived assets for the years ended December 31, 2021 or 2020. The Company had $0.7 million of impairment related to certain photo enforcement programs that ended during the year ended December 31, 2022 within the depreciation, amortization and (gain) loss on disposal of assets, net line item on the consolidated statements of operations.

Self-Insurance

The Company is self-insured for medical costs and has stop-loss insurance policies to limit its exposure to individual and aggregate claims made. Liabilities for these programs are estimated based on outstanding claims and claims estimated to be incurred but not yet reported using historical loss experience. These estimates are subject to variability due to changes in trends of losses for outstanding claims and incurred but not reported claims, including external factors such as the number, and cost of, claims, benefit level changes and claim settlement patterns.

Warrants

As of December 31, 2022, there were warrants outstanding to acquire 19,999,967 shares of the Company’s Class A Common Stock including: (i) 6,666,666 Private Placement Warrants and (ii) 13,333,301 warrants issued in connection with the IPO (the “Public Warrants” and, together with the Private Placement Warrants, the “Warrants”).

70

The Warrants entitle the registered holder to purchase one share of our Class A Common Stock at a price of $11.50 per share, subject to certain adjustments.

The Warrants became exercisable on November 16, 2018, 30 days following the completion of the Business Combination, and expire five years after that date, or earlier upon redemption or liquidation. The Company may redeem the outstanding Public Warrants at a price of $0.01 per warrant, if the last sale price of its Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third business day before it sends the notice of redemption to the Warrant holders. The Private Placement Warrants, however, are nonredeemable so long as they are held by Gores Sponsor II, LLC or its permitted transferees.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance under FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares, among other conditions for equity classification.

For warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The Company’s Public Warrants meet the criteria for equity classification and accordingly, are reported as a component of shareholders’ equity while the Company’s Private Placement Warrants do not meet the criteria for equity classification because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares and are instead classified as a liability. The fair value of the Private Placement Warrants is estimated at period-end using a Black-Scholes option pricing model. Shares issuable under the Warrants are considered for inclusion in the diluted share count in accordance with GAAP. As the shares issuable under the Warrants are issuable shares when exercised by the holders, they are included when computing diluted income (loss) per share, if such exercise is dilutive to income (loss) per share.

Interest Rate Swap

In December 2022, the Company entered into a cancellable interest rate swap agreement to hedge its exposure to interest rate fluctuations associated with the LIBOR portion of the variable interest rate on its 2021 Term Loan. Under the interest rate swap agreement, the Company pays a fixed rate and the counterparty pays a variable interest rate. The Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement with the counterparty which provides for the net settlement of all, or a specified group, of derivative transactions through a single payment. The notional amount on the interest rate swap is $675 million. The Company has the option to terminate the interest rate swap agreement starting in December 2023, and monthly thereafter until December 2025. The Company is treating the interest rate swap as an economic hedge for accounting purposes and any changes in the fair value of the derivative instrument (including accrued interest) are recorded in the consolidated statements of operations within the gain on interest rate swap line item. The Company recorded a $1.0 million gain on interest rate swap for the year ended December 31, 2022, which is recorded within operating activities on the consolidated statements of cash flows. The fair value of cash flows of approximately $1.0 million due within one year are presented in the accrued liabilities line item and the fair value of cash flows of $2.0 million received greater than one year are within the other non-current assets line item on the consolidated balance sheet as of December 31, 2022. See below for discussion on the fair value measurement of the interest rate swap, and Note 9, Long-term Debt, for additional information on the Company's mix of fixed and variable debt.

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement, includes a single definition of fair value to be used for financial reporting purposes, provides a framework for applying this definition and for measuring fair value under GAAP, and

71

establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are summarized as follows:

Level 1 – Fair value is based on observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2 – Fair value is determined using quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs other than quoted prices that are directly or indirectly observable.

Level 3 – Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as a pricing model, discounted cash flow, or similar technique.

The carrying amounts reported in the Company’s consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the immediate to short-term maturity of these financial instruments. The estimated fair value of the Company’s long term debt was calculated based upon available market information. The carrying value and the estimated fair value are as follows:

	Level in	December 31, 2022				December 31, 2021
	Fair Value	Carrying		Estimated		Carrying		Estimated
($ in thousands)	Hierarchy	Amount		Fair Value		Amount		Fair Value
2021 Term Loan	2	$	866,365	$	883,891	$	871,467	$	895,125
Senior Notes	2		345,615		313,250		344,918		355,250
Revolver	2		—		—		24,435		25,000

The fair value of the private placement warrant liabilities is measured on a recurring basis and is estimated using the Black-Scholes option pricing model using significant unobservable inputs, primarily related to estimated volatility, and is therefore classified within level 3 of the fair value hierarchy. The key assumptions used were as follows:

	December 31, 2022			December 31, 2021
Stock price	$	13.83		$	15.43
Strike price	$	11.50		$	11.50
Volatility		44.0	%		48.0	%
Remaining life (in years)		0.8			1.8
Risk-free interest rate		4.74	%		0.66	%
Expected dividend yield		0.0	%		0.0	%
Estimated fair value	$	3.61		$	5.77

The Company is exposed to valuation risk on these Level 3 financial instruments. The risk of exposure is estimated using a sensitivity analysis of potential changes in the significant unobservable inputs, primarily the volatility input that is the most susceptible to valuation risk. A 5% increase to the volatility input at December 31, 2022 would increase the estimated fair value by $0.19 per unit. A 5% decrease to the volatility input at December 31, 2022 would decrease the estimated fair value by $0.18 per unit. The following summarizes the changes in fair value of private placement warrant liabilities included in net income (loss) for the respective periods:

($ in thousands)	December 31, 2022			December 31, 2021
Beginning balance	$	38,466		$	30,866
Change in fair value of private placement warrants		(14,400	)		7,600
Ending balance	$	24,066		$	38,466

The Company has an equity investment measured at cost which is only adjusted to fair value if there are identified events that would indicate a need for an upward or downward adjustment or changes in circumstances that may indicate impairment. The estimation of fair value requires the use of significant unobservable inputs, such as voting rights and obligations in the securities held, and is therefore classified within level 3 of the fair value hierarchy. The carrying value of the investment was $2.1 million and $3.7 million as of December 31, 2022 and 2021, respectively. The Company considered the existence of impairment indicators by evaluating the financial and liquidity position and as a result, remeasured the equity investment to fair value and recorded an impairment of $1.3 million

72

during the year ended December 31, 2022. There were no identified events that required a fair value adjustment as of December 31, 2021.

The fair value of the contingent consideration payable in connection with the NuPark acquisition was $1.5 million at December 13, 2021 acquisition date and was classified within level 3 of the fair value hierarchy. The valuation of the contingent consideration was measured using a discounted cash flow model and the significant unobservable inputs used in the measurement relate to forecasts of annualized revenue developed by the Company. During fiscal year 2022, the Company made payments to settle in full the contingent consideration payable to Passport Labs Inc, and there was no remaining payable as of December 31, 2022.

The recurring fair value measurement of the interest rate swap was valued based on observable inputs for similar assets and liabilities including swaption values and other observable inputs for interest rates and yield curves and is classified within level 2 of the fair value hierarchy.

Asset Retirement Obligation

The Company records obligations to perform certain retirement activities on camera and speed enforcement systems in the period that the related assets are placed in service. Asset retirement obligations are contractual obligations to restore property to its initial state. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to operating expenses in the consolidated statements of operations. The associated asset retirement obligation is capitalized as part of the related asset’s carrying value and is depreciated over the asset’s estimated remaining useful life. When events and circumstances indicate that the original estimates used for asset retirement obligations may need revision, the Company reassesses the assumptions used and adjusts the liability appropriately.

Deferred Financing Costs

Deferred financing costs consist of the costs incurred to obtain long-term financing, including the Company’s credit facilities (See Note 9). These costs, which are a reduction to long-term debt on the consolidated balance sheets, are amortized over the term of the related debt, using the effective interest method for term debt and the straight-line method for revolving credit facilities. Amortization of deferred financing costs for fiscal years 2022, 2021 and 2020 was $5.5 million, $5.2 million, and $5.4 million respectively.

Income Taxes

The Company accounts for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the financial statements. Deferred tax assets generally represent items that can be used as a tax deduction or credit in tax returns in future years, while deferred tax liabilities generally represent items that generate a future tax liability for items where deductions have been accelerated for tax purposes. The Company provides a valuation allowance for deferred tax assets if it is more likely than not that some portion or all of the tax assets will not be realized. The Company calculates the valuation allowance in accordance with the authoritative guidance relating to income taxes, which requires an assessment of both positive and negative evidence regarding the realizability of these deferred tax assets when measuring the need for a valuation allowance. Significant judgment is required in determining any valuation allowance against deferred tax assets. The realization of deferred tax assets can be affected by, among other things, the nature, frequency, and severity of current and cumulative losses, forecasts of future profitability, the length of statutory carryforward periods, our experience with utilizing operating losses and tax credit carryforwards by jurisdiction, the reversal of existing taxable temporary differences and tax planning alternatives and strategies that may be available.

The Company’s effective tax rate is based on income, statutory tax rates, differences in the deductibility of certain expenses and inclusion of certain income items between financial statement and tax return purposes, and tax planning opportunities available to it in the various jurisdictions in which it operates. Under GAAP, if the Company determines that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, the Company recognizes the benefit. Tax code and regulations require certain items to be included in the tax return at different times than when those items are required to be recorded in the consolidated

73

financial statements. As a result, the effective tax rate reflected in its consolidated financial statements is different from that reported in its tax returns. Some of these differences are permanent, such as meals and entertainment expenses that are not fully deductible on the Company’s tax returns, and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities.

The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax provision or benefit.

Stock-based Compensation

In October 2018, the Company established the Verra Mobility 2018 Equity Incentive Plan (the “2018 Plan”) which provides for a variety of stock-based awards for issuance to employees and directors. The Company grants RSUs, stock options and performance share units (“PSUs”).

The Company recognizes the fair value of RSUs based on the Company’s common stock price at market close on the date of the grant. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options, and uses the Monte Carlo simulation model to determine the fair value of PSUs containing market conditions. The Black-Scholes model requires an assumption regarding the expected life of the stock option, which the Company estimated to be 6.25 years by applying the short-cut method permitted under SEC Staff Accounting Bulletin No. 110. The expected term of PSUs granted was three years, which matches the awards’ performance period. RSUs and stock options vest based on the continued service of the recipient. PSUs are issued upon continued service along with the relative satisfaction of a market condition that measures the Company’s total stockholder return relative to a comparably calculated return for a peer group during the performance period. In addition, the Black-Scholes and the Monte Carlo models require assumptions to be made regarding the expected volatility of the Company’s stock price. Stock price volatility is determined by averaging an implied volatility with the measure of historical volatility.

The following represents our weighted average assumptions for stock options and PSUs granted for the respective periods:

	For the Year Ended December 31,
	2022			2021			2020
Stock options
Weighted average expected volatility		45.1	%		47.7	%		34.5	%
Weighted average risk-free interest rate		2.94	%		0.94	%		0.73	%
PSUs
Weighted average expected volatility		48.0	%		50.4	%		34.0	%
Weighted average risk-free interest rate		2.78	%		0.33	%		0.61	%

Compensation expense for share-based awards is determined based on the grant date fair value. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based award. The compensation expense for the PSUs is recognized over the requisite service period regardless of whether the market condition is satisfied. Forfeitures are accounted for as they occur. See Note 14, Equity Incentive Plan, for more information on the Company’s share-based awards.

Revenue Recognition

Nature of Goods and Services

74

The following is a description of principal activities, separated by reportable segments, from which the Company generates revenue:

Commercial Services. The Commercial Services segment offers toll and violation management solutions for the commercial fleet and rental car industries. The Company determined its performance obligation is a distinct stand-ready obligation, as there is an unspecified quantity of services provided that does not diminish, and the customer is being charged only when it uses the Company’s services, such as toll payment, title and registration, etc. Payment terms for contracts with commercial fleet and rental car companies vary, but are usually billed as services are performed. The Company recognizes revenue from these services over time.

Government Solutions. The Government Solutions segment principally generates revenue by providing complete, end-to-end speed, red-light, school bus stop arm, and bus lane enforcement solutions. Products, when sold, are typically sold together with the services in a bundle for a majority of customers. The average initial term of a contract is 3 to 5 years. Payment terms for contracts with government agencies vary depending on whether the consideration is fixed or variable. Payment terms for contracts with fixed consideration are usually based on equal installments over the duration of the contract. Payment terms for contracts with variable consideration are usually billed and collected as citations are issued or paid. In instances when the consideration expected from the customer is subject to variation, any variable consideration affecting revenue recognition is allocated to the distinct period (the monthly period) that it relates to.

For bundled offerings, the Company accounts for individual products and services separately if they are distinct – i.e., if a product or service is separately identifiable from other items in the bundle and if a customer can benefit from it as a stand-alone item. The consideration is allocated between separate products and services in a bundle based on their stand-alone selling prices (“SSP”). The Company estimates the SSP for its services based upon observable evidence, market conditions and other relevant inputs. If products are sold without the related services, no allocation is required.

•Product sales (sale of camera systems and installation) – the camera systems and related installation services are highly interdependent and interrelated and are accounted for as a single performance obligation. The revenues for this performance obligation are generally recognized at the point in time when the installation process is completed and the camera system is ready to perform the services as expected by the customer. Generally, this occurs at site acceptance or first citation.

•Service revenue – the Company has determined its performance obligation is to provide a complete end-to-end safety and enforcement solution. Promises include providing a system to capture images, processing images taken by the camera, forwarding eligible images to the police department and processing payments on behalf of the municipality. The Company has determined that certain of the promises to its customers are capable of being distinct as they are capable of providing some measure of benefit to the customer either on their own or together with other resources that are readily available to the customer. However, the Company has determined the promises to its customers do not meet the criterion of being distinct within the context of its contracts. The Company would not be able to fulfill its promises individually as its customers could not obtain the intended benefit from the contract without the Company fulfilling all promises. Accordingly, the Company concluded that each contract represents one service offering and is a single performance obligation to the customer. Further, the Company accounts for all the services as a single continuous service. The Company applied the series guidance for those services as it stands ready to deliver those services over the contract period. The Company recognizes revenue from services over time, as they are performed.

Parking Solutions. The T2 Systems business offers an integrated suite of parking software and hardware solutions to its customers. Revenue is derived primarily from the sale of software as a service (“SaaS”) and specialized hardware. For bundled offerings, the Company accounts for individual products and services separately if they are distinct and allocate the transaction price based on the relative SSP. For substantially all performance obligations except SaaS subscriptions, the Company is able to establish the SSP based on the observable prices of products or services sold separately in comparable transactions. The Company’s estimates of SSP are reassessed on a periodic basis or when facts and circumstances change. The Company is unable to establish the SSP for its software licenses based on observable prices given the same products are sold at a broad range of prices and a representative SSP is not discernible from past transactions or other observable evidence, as such, the SSP for software licenses included in a contract with multiple performance obligations is generally determined by applying a residual approach.

75

•The Company’s hosted parking management software products provide customers the ability to manage access to their parking lots and garages, issue physical or virtual parking permits and manage citations issued through enforcement devices. Revenue derived from these SaaS products is recognized ratably over the contractual service period beginning on the date the service is made available to the customer.

•Service revenue derived from the Company’s professional services are recognized over time as the services are performed. Revenues for fixed-price service projects are generally recognized over time applying input methods to estimate progress to completion.

•Revenue from product sales is recognized at a point in time when a customer takes control of the hardware, which typically occurs when the product is delivered to the customer and ownership is transferred to the customer.

Deferred Revenue

Deferred revenue represents amounts that have been invoiced in advance which are expected to be recognized as revenue in future periods, and it primarily relates to the Government Solutions and Parking Solutions customers. As of December 31, 2021 and 2022, the Company had approximately $8.9 million and $12.2 million of deferred revenue in the Government Solutions segment. The majority of the remaining performance obligations as of December 31, 2022 are expected to be completed and recognized in 2023 and $4.7 million is expected to be recognized between 2024 through 2027. As of December 31, 2021 and 2022, the Company had approximately $20.9 million and $21.2 million of deferred revenue in the Parking Solutions segment. The majority of the remaining performance obligations as of December 31, 2022 are expected to be completed and recognized as revenue in 2023 and $0.5 million is expected to be recognized in 2024.

Credit Card Rebates

The Company earns volume rebates from total spend on purchasing cards and recognizes the income in other income, net in the consolidated statements of operations. For the fiscal years ended December 31, 2022, 2021 and 2020, the Company recorded $14.5 million, $11.3 million, and $8.5 million respectively, related to rebates.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs for the fiscal years ended December 31, 2022, 2021 and 2020, were $1.0 million, $0.7 million and $0.8 million, respectively, and were included in selling, general, and administrative expenses in the consolidated statements of operations.

Foreign Currency

Assets and liabilities denominated in foreign currencies that differ from their functional currencies are re-measured at the exchange rate on the balance sheet date. The foreign currency effect of the re-measurement is included in other income, net in the consolidated statements of operations. The impact of foreign currency re-measurement was (losses) gains of $(0.7) million, $(0.2) million and $0.4 million for the fiscal years ended December 31, 2022, 2021 and 2020, respectively.

The assets and liabilities of our foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at current exchange rates while revenue and expenses are translated from functional currencies at average monthly exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive loss in stockholders’ equity.

Acquisitions

The Company applies the acquisition method to account for business combinations. The Company allocates the fair value of the purchase price consideration to assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair value of the identifiable assets and liabilities is recorded as goodwill. The Company includes the results of operations of businesses acquired from the date of the respective acquisition. Any transaction costs associated with acquisitions are expensed as incurred.

76

Measurement period adjustments to preliminary purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of any changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed at the acquisition date. If applicable, we estimate the fair value of contingent consideration payments in determining the purchase price. Contingent consideration is adjusted to fair value in subsequent periods as an increase or decrease in selling, general and administrative expenses.

The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, and includes the use of independent valuation specialists to assist the Company in estimating fair values of acquired tangible and intangible assets. Although the Company believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from estimates.

Recent Accounting Pronouncements

Accounting Standards Adopted

In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another topic. It specifically addresses the measurement and recognition of the effect of a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option if it remains equity-classified after the modification or exchange. The Company adopted this standard as of January 1, 2022, which did not have an impact on its financial statements and related disclosures, as the Company had no transactions subject to the standard. If the Company were to have modifications or exchanges in the future, such guidance would apply.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The amendments require annual disclosures regarding the nature of any transactions with a government accounted for by applying a grant or contribution accounting model by analogy and the related accounting policy used, the effect of the assistance on the entity’s financial statements, and the significant terms and conditions of the transactions. The Company adopted the ASU as of January 1, 2022, which did not have a material impact on its financial statements or related disclosures.

Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. It provides optional expedients and exceptions for applying GAAP to contract modifications, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which extended the period of time stakeholders can utilize the reference rate reform relief guidance for two additional years until December 31, 2024.

Under the terms of the 2021 Term Loan (as defined below) discussed in Note 9, Long-term Debt, in the event there is a benchmark transition away from LIBOR, a benchmark replacement rate has been defined in the 2021 Term Loan agreement along with the mechanism for such a transition to take place. The Company does not anticipate this transition will have a material impact on its consolidated financial statements.

On June 30, 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual

77

restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also requires entities with investments in equity securities subject to contractual sale restrictions to disclose certain qualitative and quantitative information about such securities. The guidance is effective for fiscal years, including interim periods beginning after December 15, 2023. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements.

3.Acquisitions

Redflex Acquisition

On June 17, 2021, the Company completed the acquisition of Redflex, an Australian public company formerly listed on the Australian Securities Exchange. At the closing of the Redflex acquisition, VM Consolidated, Inc., an indirect wholly owned subsidiary of the Company, purchased one hundred percent of the outstanding equity of Redflex at A$0.96 per share at consideration of A$152.5 million, or approximately US$117.9 million. Transaction costs for Redflex were $9.7 million which primarily related to professional fees and other expenses related to the acquisition. At the date of acquisition, Redflex was a provider of intelligent traffic management products and services that are sold and managed in the Asia Pacific, North America, Europe, and Middle East regions. Redflex designed, manufactured, and operated a range of platform-based solutions, utilizing advanced sensor and image capture technologies to enable active management of state and local motorways. The Company has included the financial results of Redflex in the financial statements from the date of acquisition.

The final allocation of the purchase consideration is summarized as follows:

($ in thousands)
Assets acquired
Cash and cash equivalents	$	8,760
Restricted cash		2,163
Accounts receivable		6,870
Unbilled receivables		5,283
Property and equipment		29,809
Deferred tax assets		10,315
Other assets		19,247
Trademark		900
Customer relationships		25,900
Developed technology		18,200
Total assets acquired		127,447
Liabilities assumed
Accounts payable and accrued liabilities		31,936
Deferred revenue		8,048
Long-term debt		14,014
Other long-term liabilities		11,736
Total liabilities assumed		65,734
Goodwill		56,214
Total purchase consideration	$	117,927

The Company finalized the evaluation of historical Redflex tax positions and the impact on assumed uncertain tax positions and other tax attributes during the three months ended March 31, 2022 which did not result in any changes to the previously disclosed amounts at December 31, 2021.

Goodwill consists largely of the expected cash flows and future growth anticipated for the Company and was assigned to the Company’s Government Solutions segment. The goodwill is not deductible for tax purposes. The customer relationships value was based on the multi-period excess earnings methodology utilizing projected cash flows. The significant assumptions used to value customer relationships included, among others, customer churn rates, forecasted revenue growth rates attributable to existing customers, forecasted EBITDA margins and the discount rate.

78

The values for the trademark and the developed technology related assets were based on a relief-from-royalty method. The significant assumptions used to value these intangible assets included, among others, forecasted revenue growth rates, royalty rates and the expected obsolescence curve. The trademark, customer relationships and the developed technology related assets were assigned useful lives of 5.0 years, 10.0 years, and 8.7 years, respectively.

T2 Systems Acquisition

On December 7, 2021, the Company acquired all of the outstanding shares of T2 Systems, which offers an integrated suite of parking software and hardware solutions to its customers. This acquisition supports the Company’s strategy to expand and diversify into new markets within the mobility sector. The Company has included the financial results of T2 Systems in the consolidated financial statements from the date of acquisition, and reported within the Parking Solutions segment.

The Company paid a purchase price of $353.2 million. Transaction costs for T2 Systems were $3.4 million which primarily related to professional fees and other expenses related to the acquisition.

The final allocation of the purchase consideration is summarized as follows:

($ in thousands)
Assets acquired
Cash and cash equivalents	$	13,866
Restricted cash		228
Accounts receivable		9,673
Unbilled receivables		2,153
Inventory		7,467
Property and equipment		3,336
Prepaid and other assets (a)		7,031
Trademark		3,200
Customer relationships		164,300
Developed technology		19,300
Total assets acquired		230,554
Liabilities assumed
Accounts payable and accrued liabilities		10,379
Deferred revenue (a)		21,002
Deferred tax liabilities (a)		37,690
Other liabilities		4,228
Total liabilities assumed		73,299
Goodwill (a)		195,982
Total assets acquired and liabilities assumed	$	353,237

(a) The Company adjusted the fair values from the initial valuation as of December 31, 2021 to reflect new information obtained about facts and circumstances that existed as of the T2 Systems acquisition date. The measurement period adjustments include an increase of $0.6 million to the deferred tax liabilities, a $0.4 million decrease to deferred tax assets included within prepaid and other assets, a $0.2 million decrease in deferred revenue, and a net offsetting increase of $0.8 million to the goodwill line item. There was no impact to the consolidated statement of operations as a result of these adjustments.

Goodwill consists largely of the expected cash flows and future growth anticipated for the Company and was assigned to the Company’s Parking Solutions segment. The goodwill is not deductible for tax purposes. The customer relationships value was based on the multi-period excess earnings methodology utilizing projected cash flows. The significant assumptions used to value customer relationships included, among others, customer upsell and churn rates, forecasted revenue growth rates attributable to existing customers, forecasted EBITDA margins and the discount rate. The values for the trademark and the developed technology related assets were based on a relief-from-royalty method. The significant assumptions used to value these intangible assets included, among others, forecasted revenue growth

79

rates, royalty rates and the expected obsolescence curve. The trademark, customer relationships and the developed technology related assets were assigned useful lives of 10.0 years, 10.0 years, and 6.1 years, respectively.

NuPark Acquisition

On December 13, 2021, the Company completed the acquisition of NuPark (“NuPark”), a provider of parking services and permit management product platform from Passport Labs, Inc., which expanded the Company’s presence in the United States in the Parking Solutions segment. The acquisition date fair value of the consideration transferred to Passport Labs, Inc. was approximately $7.0 million, which consisted primarily of $5.5 million of cash (inclusive of a $0.5 million indemnity holdback) and $1.5 million of contingent consideration payable. The Company recorded $0.3 million of tangible assets, $4.9 million of customer relationships intangible assets valued using a multi-period excess earnings methodology, with an estimated useful life of 10.0 years, and $1.3 million of assumed liabilities, which was primarily deferred revenue. Goodwill recorded was $3.2 million for future growth anticipated for the Company and is deductible for tax purposes. The Company has included the financial results of NuPark in the consolidated financial statements from the date of acquisition, which were not material. The transaction costs for the acquisition were not material.

During fiscal year 2022, the Company recorded a measurement period adjustment to reduce the customer relationship intangible assets’ value by $0.6 million. Additionally, the Company made payments that totaled approximately $0.9 million to settle in full the contingent consideration payable to Passport Labs Inc.

Pro Forma Financial Information (Unaudited)

The pro forma information below gives effect to the Redflex and T2 systems acquisitions as if they had been completed on the first day of each period presented. Pro forma information for NuPark was not provided as it was not material. The pro forma results of operations are presented for information purposes only. As such, they are not necessarily indicative of the Company’s results had the Redflex and T2 systems acquisitions been completed on the first day of each period presented, nor do they intend to represent the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions and does not reflect additional revenue opportunities following the acquisition of Redflex and T2 Systems. The pro forma information includes adjustments to record the assets and liabilities associated with the Redflex and T2 Systems acquisitions at their respective fair values and to give effect to the financing of the acquisitions.

	For the Year Ended December 31,
($ in thousands)	2021		2020
Revenue	$	650,567	$	530,807
Net income (loss)		30,099		(58,695	)

The pro forma results primarily include adjustments related to amortization of intangibles, depreciation expense, interest expense and related debt extinguishment costs from the debt refinancing transactions and exclusion of acquisition-related costs and certain capitalized costs related to operating leases and developed technology.

4.Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following at December 31:

($ in thousands)	2022		2021
Prepaid tolls	$	9,978	$	7,539
Prepaid services		9,171		8,643
Prepaid income taxes		4,629		5,324
Prepaid computer maintenance		5,492		3,742
Costs to fulfill a customer contract		3,193		3,364
Prepaid insurance		3,112		4,293
Deposits		2,057		6,742
Other		1,972		1,809
Total prepaid expenses and other current assets	$	39,604	$	41,456

80

5.Property and Equipment, Net

Property and equipment, net, consists of the following at December 31:

($ in thousands)	2022			2021
Equipment installed at customer sites	$	122,507		$	112,770
Software		30,288			24,207
Leasehold improvements		9,806			9,255
Computer equipment		20,274			14,215
Furniture		2,648			2,662
Automobiles		12,933			4,761
Construction in progress		19,357			12,169
Property and equipment		217,813			180,039
Less: accumulated depreciation		(108,038	)		(83,973	)
Property and equipment, net	$	109,775		$	96,066

Depreciation expense was $32.2 million, $26.8 million and $23.1 million for the fiscal years ended December 31, 2022, 2021 and 2020, respectively, including depreciation related to costs to develop or implement software for internal use of $3.4 million, $4.4 million and $4.3 million for the fiscal years ended December 31, 2022, 2021 and 2020, respectively.

6.Goodwill and Intangible Assets

The following table presents the changes in the carrying amount of goodwill by reportable segment:

	Commercial			Government			Parking
($ in thousands)	Services			Solutions			Solutions		Total
Balance at December 31, 2020	$	426,689		$	159,746		$	—	$	586,435
Acquisition of Redflex		—			56,214			—		56,214
Acquisition of T2 Systems		—			—			195,226		195,226
Acquisition of NuPark		—			—			3,160		3,160
Foreign currency translation adjustment		(1,608	)		(560	)		—		(2,168	)
Balance at December 31, 2021		425,081			215,400			198,386		838,867
Measurement period adjustment (a)		—			—			756		756
Foreign currency translation adjustment		(5,361	)		(782	)		—		(6,143	)
Balance at December 31, 2022	$	419,720		$	214,618		$	199,142	$	833,480

(a) This is a measurement period adjustment related to the T2 Systems acquisition, see Note 3. Acquisitions for additional information.

Intangible assets consist of the following as of the respective period-ends:

	Weighted	Weighted	At December 31, 2022
	Average	Average	Gross
	Remaining	Amortization	Carrying			Accumulated
($ in thousands)	Useful Life	Period	Amount			Amortization
Trademarks	0.4 years	3.7 years	$	36,151		$	32,233
Non-compete agreements	0.1 years	5.0 years		62,529			60,926
Customer relationships	5.5 years	9.3 years		557,570			227,102
Developed technology	1.2 years	5.8 years		201,548			160,117
Gross carrying value of intangible assets				857,798		$	480,378
Less: accumulated amortization				(480,378	)
Intangible assets, net			$	377,420

81

	Weighted	Weighted	At December 31, 2021
	Average	Average	Gross
	Remaining	Amortization	Carrying			Accumulated
($ in thousands)	Useful Life	Period	Amount			Amortization
Trademarks	0.5 years	3.7 years	$	36,225		$	31,429
Non-compete agreements	1.0 years	5.0 years		62,555			49,982
Customer relationships	6.5 years	9.3 years		561,767			167,255
Developed technology	2.2 years	5.8 years		202,768			127,350
Gross carrying value of intangible assets				863,315		$	376,016
Less: accumulated amortization				(376,016	)
Intangible assets, net			$	487,299

Amortization expense was $106.2 million, $89.9 million and $93.5 million for fiscal years ended December 31, 2022, 2021 and 2020, respectively.

Estimated amortization expense in future years is expected to be:

($ in thousands)
2023	$	77,347
2024		66,859
2025		64,161
2026		57,170
2027		28,353
Thereafter		83,530
Total	$	377,420

7.Accrued Liabilities

Accrued liabilities consist of the following at December 31:

($ in thousands)	2022		2021
Accrued salaries and wages	$	19,109	$	15,744
Current deferred tax liabilities		7,559		—
Current portion of operating lease liabilities		6,355		5,760
Accrued interest payable		4,459		4,209
Restricted cash due to customers		3,541		3,062
Payroll liabilities		2,136		1,876
Advanced deposits		1,029		2,554
Current portion of interest rate swap liability		977		—
Other		3,682		5,230
Total accrued liabilities	$	48,847	$	38,435

82

8.Asset Retirement Obligations

The following summarizes the changes in the Company’s asset retirement obligations for the years ended December 31:

($ in thousands)	2022			2021
Asset retirement obligations, beginning balance	$	11,824		$	6,409
Liabilities incurred (a)		944			5,210
Accretion expense		445			308
Liabilities settled		(220	)		(103	)
Asset retirement obligations, ending balance	$	12,993		$	11,824

(a) For the year ended December 31, 2022, this includes approximately $0.4 million increase resulting from a change in estimate for the impact of inflation. For the year ended December 31, 2021, this includes $3.9 million of asset retirement obligations assumed as part of the Redflex acquisition in 2021, and a $1.2 million increase resulting from a change in estimate for the impact of inflation.

9.Long-term Debt

The following table provides a summary of the Company’s long-term debt at December 31:

($ in thousands)	2022			2021
2021 Term Loan, due 2028	$	886,106		$	895,125
Senior Notes, due 2029		350,000			350,000
PPP Loan		—			2,933
Revolver		—			25,000
Less: original issue discounts		(5,637	)		(6,753	)
Less: unamortized deferred financing costs		(18,489	)		(22,551	)
Total long-term debt		1,211,980			1,243,754
Less: current portion of long-term debt		(21,935	)		(36,952	)
Total long-term debt, net of current portion	$	1,190,045		$	1,206,802

The following table presents the aggregate principal and interest payments in future years on long-term debt as of December 31, 2022:

($ in thousands)	Principal		Interest (1)
2023	$	21,935	$	87,755
2024		9,019		87,056
2025		9,019		86,172
2026		9,019		85,474
2027		9,019		84,775
Thereafter		1,178,095		33,015
Total	$	1,236,106	$	464,247

(1) The variable interest rate in effect as of December 31, 2022 was used to calculate interest payments for the 2021 Term Loan.

2021 Term Loan and Senior Notes

In March 2021, VM Consolidated, Inc., the Company’s wholly owned subsidiary (“VM Consolidated”), 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 $650.0 million, maturing on March 26, 2028, and an accordion feature providing for an additional $250.0 million of term loans, subject to satisfaction of certain requirements. In connection with the 2021 Term Loan, the Company had an offering discount cost of $3.3 million and $0.7 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan.

83

In addition, in March 2021, VM Consolidated issued an aggregate principal amount of $350 million in Senior Unsecured Notes (the “Senior Notes”), due on April 15, 2029. In connection with the issuance of the Senior Notes, the Company 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.

The net proceeds from both the 2021 Term Loan and the Senior Notes were used in March 2021 to repay in full all outstanding debt which was represented by the First Lien Term Loan Credit Agreement (as amended, the “2018 Term Loan”) with a balance of $865.6 million.

On December 7, 2021, VM Consolidated entered into an agreement to exercise the accordion feature under the 2021 Term Loan, borrowing $250.0 million in incremental term loans (“Incremental Term Loan”). The proceeds from the Incremental Term Loan were used, along with cash on hand, to fund the acquisition of T2 Systems, including repayment in full all outstanding debt for T2 Systems. In connection with the Incremental Term Loan, the Company had an offering discount cost of $1.3 million and $3.8 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan. The Incremental Term Loan accrued interest from the date of borrowing until December 31, 2021, at which time, it was combined with the 2021 Term Loan to be a single tranche of term loan borrowings. The total principal outstanding under the 2021 Term Loan, which includes the Incremental Term Loan, was $886.1 million at December 31, 2022.

The 2021 Term Loan is repayable at 1.0% per annum of the amount initially borrowed, paid in quarterly installments. It bears interest based, at the Company’s option, on either (1) LIBOR plus an applicable margin of 3.25% per annum, or (2) an alternate base rate plus an applicable margin of 2.25% per annum. As of December 31, 2022, the interest rate on the 2021 Term Loan was 7.6%.

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, beginning with the year ending December 31, 2022), 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%

The Company will make a $12.9 million mandatory prepayment of excess cash flows during the first quarter of fiscal year 2023, which was classified as current portion of long-term debt in the consolidated balance sheet at December 31, 2022. We did not have a mandatory prepayment of excess cash flow for the fiscal year ended December 31, 2021.

Interest on the Senior Notes is fixed at 5.50% per annum and is payable on April 15 and October 15 of each year. On or after April 15, 2024, the Company 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
2024	102.750%
2025	101.375%
2026 and thereafter	100.000%

In addition, the Company may redeem up to 40% of the Senior Notes before April 15, 2024, with the net cash proceeds from certain equity offerings.

The Company evaluated the March 2021 refinancing transactions on a lender-by-lender basis and accounted for the portion of the transaction that did not meet the accounting criteria for debt extinguishment as a debt modification.

84

Accordingly, the Company recognized a loss on extinguishment of debt of $5.3 million on the 2018 Term Loan during the year ended December 31, 2021, consisting of a $4.0 million write-off of pre-existing deferred financing costs and discounts and $1.3 million of lender and third-party costs associated with the issuance of the 2021 Term Loan.

PPP Loan

During fiscal year 2020, Redflex received a $2.9 million loan from the U.S. Small Business Administration (“SBA”) as part of the Paycheck Protection Program (“PPP Loan”) to offset certain employment and other allowable costs incurred as a result of the COVID-19 pandemic. In early 2021, Redflex applied for forgiveness of this loan, and on September 23, 2022, the Company was notified by the SBA that the loan, together with accrued interest, had been fully forgiven under the provisions of the PPP Loan program. Accordingly, the Company recognized a $3.0 million gain on extinguishment of debt in the consolidated statement of operations for the year ended December 31, 2022.

The Revolver

The Company has a Revolving Credit Agreement (the “Revolver”) with a commitment of up to $75.0 million available for loans and letters of credit. The Revolver matures on December 20, 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) LIBOR plus an applicable margin, or (2) an alternate base rate, plus an applicable margin. The margin percentage applied to (1) LIBOR 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 the Company’s average availability to borrow under the commitment. At December 31, 2021, the Company had $25.0 million in outstanding borrowings on the Revolver, which was repaid in full in January 2022. At December 31, 2022, the availability to borrow was $74.8 million, net of $0.2 million of outstanding letters of credit.

Interest on the unused portion of the Revolver is payable quarterly at 0.375% and the Company is also required to pay participation and fronting fees at 1.38% on $0.2 million of outstanding letters of credit as of December 31, 2022.

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 the Company’s assets are pledged as collateral to secure the Company’s indebtedness under the 2021 Term Loan. At December 31, 2022, the Company was compliant with all debt covenants.

Interest Expense

The Company recorded interest expense, including amortization of deferred financing costs and discounts, of $69.4 million, $44.9 million and $40.9 million for the fiscal years ended December 31, 2022, 2021 and 2020 respectively.

The weighted average effective interest rates on the Company’s outstanding borrowings were 7.0% and 4.1% at December 31, 2022 and December 31, 2021, respectively.

See Note 2, Significant Accounting Policies, for additional information on the interest rate swap entered into in December 2022 to hedge the Company's exposure against rising interest rates.

10.Leases

The Company’s operating leases primarily consist of office, equipment and vehicle leases expiring at various dates through April 2035. The Company has lease agreements with lease and non-lease components and has elected to account for such components as a single lease component. The Company recognizes and measures contracts containing a lease and determines lease classification at commencement. Right of use operating assets and lease liabilities are measured based on the estimated present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses its estimated incremental borrowing rate when the rate implicit in

85

the lease cannot be readily determined. The estimated incremental borrowing rate is based upon information available at lease commencement including publicly available data for debt instruments. The lease term includes periods covered by options to extend when it is reasonably certain the Company will exercise such options as well as periods subsequent to an option to terminate the lease if it is reasonably certain the Company will not exercise the termination option. Certain of the lease agreements have rent abatement and escalating rental payment provisions. Operating lease costs are recognized on a straight-line basis over the lease term. Variable lease costs are recognized as incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company does not have material short-term leases and does not engage in subleasing activities.

As of December 31, 2022, operating leases had a remaining weighted average lease term of 8.6 years and operating lease liabilities were measured using a weighted average discount rate of 5.0%. The total operating lease costs for the fiscal years ended December 31, 2022, 2021 and 2020 were $8.8 million, $7.5 million and $5.3 million, respectively. Variable lease costs for fiscal years ended December 31, 2022, 2021 and 2020 were approximately $1.5 million, $1.4 million and $1.1 million, respectively. Finance leases for the Company are not material.

The following is a summary of the operating lease liabilities as of December 31:

($ in thousands)	2022		2021
Operating lease liabilities, net of current portion	$	33,362	$	34,984
Current portion		6,202		5,760
Total operating lease liabilities	$	39,564	$	40,744

The following provides future maturities of operating lease liabilities as of December 31, 2022:

($ in thousands)
2023	$	8,107
2024		7,736
2025		5,329
2026		4,440
2027		3,341
Thereafter		21,033
Total minimum payments		49,986
Less: amount representing interest		(10,422	)
Total	$	39,564

11.Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net income (loss) per share is calculated by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method.

86

The components of basic and diluted net income (loss) per share are as follows:

	For the Year Ended December 31,
(In thousands, except per share data)	2022		2021		2020
Numerator:
Net income (loss)	$	92,475	$	41,449	$	(4,578	)
Denominator:
Weighted average shares - basic		152,848		159,983		161,632
Common stock equivalents		6,178		3,795		—
Weighted average shares - diluted		159,026		163,778		161,632
Net income (loss) per share - basic	$	0.61	$	0.26	$	(0.03	)
Net income (loss) per share - diluted	$	0.50	$	0.25	$	(0.03	)
Antidilutive shares excluded from diluted net income (loss) per share:
Contingently issuable shares (1)		5,000		5,000		5,000
Public warrants		—		—		13,333
Private placement warrants		—		6,667		6,667
Non-qualified stock options		1,149		1,018		614
Performance share units		157		130		106
Restricted stock units		742		432		2,203
Total antidilutive shares excluded		7,048		13,247		27,923

(1) Contingently issuable shares relate to the earn-out agreement as discussed in Note 16, Other Significant Transactions.

12.Income Taxes

A provision of the Tax Cuts and Jobs Act of 2017 became effective on January 1, 2022. This provision requires companies to capitalize and amortize research and development (“R&D”) expenses over 5 years (and 15 years for non-U.S. R&D expenses) as opposed to deducting those expenses in the year they are incurred. The enacted provision did not have a material impact on the Company’s consolidated financial statements.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022, which is effective January 1, 2023 and contains provisions implementing a 15% minimum corporate income tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. While the Company is continuing to evaluate the impact of these provisions, at this time, they are not expected to have a material impact on the Company’s consolidated financial statements.

Income before income taxes consisted of the following:

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
U.S.	$	140,858		$	77,101		$	6,429
Foreign		(13,750	)		(9,200	)		(5,576	)
Total income before incomes taxes	$	127,108		$	67,901		$	853

87

The income tax provision consisted of the following:

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
Current
Federal	$	34,071		$	25,361		$	4,169
State		14,779			10,523			5,399
Foreign		1,777			160			652
Total current		50,627			36,044			10,220
Deferred
Federal		(8,069	)		(7,434	)		(1,308	)
State		(4,863	)		(1,627	)		(2,615	)
Foreign		(3,062	)		(531	)		(866	)
Total deferred		(15,994	)		(9,592	)		(4,789	)
Income tax provision	$	34,633		$	26,452		$	5,431

A reconciliation to the income tax provision from the amounts computed by applying the statutory U.S. federal income tax rate is as follows:

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
Income tax provision at statutory rate	$	26,693		$	14,259		$	179
State income taxes, net of federal income tax effect		8,588			6,748			1,188
Tax rate changes/ valuation of deferred tax items		—			586			1,353
162(m) limitation		1,766			1,325			1,179
Non-deductible expenses		30			174			1,786
Stock-based compensation		(545	)		(752	)		(38	)
Unrecognized tax benefits		1,215			174			(929	)
Tax impact for change in fair value of warrants		(3,024	)		1,596			237
Change in valuation allowance		1,429			1,435			924
Non-deductible transaction costs		—			1,078			19
Research and development credits		(517	)		(125	)		(121	)
Other		(1,002	)		(46	)		(346	)
Total income tax provision	$	34,633		$	26,452		$	5,431

88

Significant components of the Company’s deferred income tax assets and liabilities consist of the following at December 31:

($ in thousands)	2022			2021
Deferred tax assets:
Accrued expenses and other	$	6,255		$	7,334
Allowance for credit losses		9,108			4,927
Net operating loss carryforward		16,476			18,193
Interest expense limitation carryforward		5,108			5,935
Federal and state income tax credits		4,965			5,295
ASC 842 operating lease liabilities		10,986			9,578
R&D Section 174 capitalization		3,248			—
Stock compensation		1,995			—
Transaction costs		458			446
Other		2,026			1,042
Gross deferred tax assets		60,625			52,750
Valuation allowance		(5,263	)		(3,785	)
Deferred tax assets, net of valuation allowance		55,362			48,965
Deferred tax liabilities:
Intangible assets and transaction costs		(42,206	)		(62,116	)
Property and equipment		(15,265	)		(13,562	)
Financing costs		(2,392	)		(3,077	)
Prepaid assets		(2,269	)		(1,235	)
ASC 842 operating lease assets		(10,403	)		(9,104	)
481(a) adjustment, net		—			(857	)
Gross deferred tax liabilities		(72,535	)		(89,951	)
Total deferred tax liabilities, net	$	(17,173	)	$	(40,986	)

As of December 31, 2022 and 2021, the Company presented $4.0 million and $6.5 million, respectively, of deferred tax assets, net, to reflect U.S. entity deferred taxes within other non-current assets in the Company's consolidated balance sheets.

As of December 31, 2022, the Company has provided income taxes on the earnings of foreign subsidiaries, except to the extent such earnings are considered indefinitely reinvested. The amount of the unrecognized deferred tax liability related to these temporary differences is approximately $0.8 million.

In accordance with ASC 740, Income Taxes, deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets can be affected by, among other things, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, limitations on the use of acquired tax attributes due to an ownership change under IRC section 382, the length of statutory carryforward periods, the Company’s experience with utilizing operating losses and tax credit carryforwards by jurisdiction, and tax planning alternatives and strategies that may be available.

The Company performed an analysis of the reversal of the deferred tax assets and considered the overall business environment, historical earnings, the outlook for future years and the impact of limitations on the use of acquired tax attributes due to an ownership change under IRC section 382. The Company determined that it is more likely than not that the benefit from certain foreign net operating loss carryforwards will not be realized as of the years ended December 31, 2022 and 2021, and as such provided a valuation allowance of $5.3 million and $3.8 million, respectively. The valuation allowance could be adjusted in future periods if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present.

89

The net operating loss carryforwards represent $124.4 million and $158.7 million of federal, state and foreign net operating losses at December 31, 2022 and 2021, respectively. The federal net operating loss carryforward at December 31, 2022 consists of $24.0 million of losses that were generated after 2017 with no expiration date. The Company also has certain tax credits of $5.6 million and $6.4 million at December 31, 2022 and 2021, respectively, which if unused will begin to expire in 2025.

The following table summarizes the activity related to the Company’s unrecognized tax benefits as of December 31:

($ in thousands)	2022			2021
Balance at the beginning of the year	$	2,878		$	953
Increases/(decreases) related to current year tax positions		8,076			447
Increases/(decreases) related to prior year tax positions		(132	)		1,478
Expiration due to statute of limitations		(147	)		—
Balance at the end of the year	$	10,675		$	2,878

Included in the balance of unrecognized tax benefits as of December 31, 2022 were $2.6 million of tax benefits that, if recognized, would impact the effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. The Company recognized $0.5 million for fiscal year 2022 and less than $0.1 million for fiscal year 2021 in interest and penalties. The Company had accrued interest and penalties of $0.5 million and less than $0.1 million at December 31, 2022 and 2021, respectively. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based on technical merits, it is more likely than not that the tax position will be sustained under examination.

The Company is subject to examination by the Internal Revenue Service and taxing authorities in various jurisdictions. The Company files U.S. federal and various foreign income tax returns which are subject to examination by the taxing authorities in the respective jurisdictions, generally for three or four years after they are filed. The Company’s state income tax returns are generally no longer subject to income tax examination by tax authorities prior to 2018; however, the Company’s net operating loss carryforwards and research credit carryforwards arising prior to that year are subject to adjustment. The Company is currently under audit by various state tax jurisdictions for the years 2018 and 2019, however, no material adjustments are anticipated. The Company regularly assesses the likelihood of tax deficiencies in each of the tax jurisdictions and, accordingly, makes appropriate adjustments to the tax provision as deemed necessary.

13.Stockholders’ Equity

The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of 261,000,000 shares of capital stock, consisting of (i) 260,000,000 shares of Class A Common Stock, and (ii) 1,000,000 shares of preferred stock, each at par value of $0.0001 per share. The outstanding shares of the Company’s common stock are duly authorized, validly issued, fully paid and non-assessable.

Share Repurchases and Retirement - 2022

On May 7, 2022, the Company’s Board of Directors authorized a share repurchase program for up to an aggregate amount of $125.0 million of its outstanding shares of Class A Common Stock over the next twelve months from time to time in open market, accelerated share repurchase (“ASR”) or privately negotiated transactions, each as permitted under applicable rules and regulations, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1 of the Securities Exchange Act of 1934 (the “Exchange Act”).

On May 12, 2022, the Company paid $50.0 million for an ASR and received an initial delivery of 2,739,726 shares of its Class A Common Stock in accordance with an ASR agreement with a third-party financial institution. The final settlement occurred on August 3, 2022, at which time, the Company received 445,086 additional shares calculated using a volume-weighted average price over the term of the ASR agreement. In addition, during the second and third quarters of 2022, the Company paid $6.9 million and repurchased 445,791 shares of its Class A Common

90

Stock through open market transactions. The Company’s Board of Directors authorized a second ASR during the third quarter of 2022 for the remaining availability under the share repurchase program. On August 19, 2022, the Company paid $68.1 million for a second ASR, and received an initial delivery of 3,300,000 shares of its Class A Common Stock in accordance with an ASR agreement with a third-party financial institution. The final settlement occurred on November 4, 2022, at which time, the Company received 943,361 additional shares calculated using a volume-weighted average price over the term of the ASR agreement. The Company accounted for each ASR transaction as a common stock repurchase and a forward contract indexed to its own common stock. The Company determined that the equity classification criteria was met for the forward contracts, therefore, it did not account for them as derivative instruments. The Company incurred $0.1 million of direct costs in connection with share repurchase transactions during fiscal year 2022, which it included in the cost of the shares acquired.

The Company paid a total of $125.0 million for shares repurchases and $0.1 million for direct costs during fiscal year 2022 and accounted for the transactions by deducting the par value from the common stock account, reducing $15.9 million from additional paid-in capital calculated using an average share price, and by increasing accumulated deficit for the remaining cost of $109.1 million.

In November 2022, the Board of Directors authorized a new share repurchase program for up to an aggregate amount of $100.0 million of the Company's outstanding shares of Class A common stock over an 18-month period in open market, ASR or privately negotiated transactions, each as permitted under applicable rules and regulations, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1 of the Exchange Act. The Company has not yet repurchased shares under this repurchase program.

Share Repurchase and Retirement - 2021

On August 9, 2021, the Company announced that its Board of Directors authorized a share repurchase program for up to an aggregate amount of $100 million of its outstanding shares of Class A Common Stock. On August 20, 2021, the Company repurchased and retired 6,849,315 shares of its Class A Common Stock from the Platinum Stockholder at a price per share of $14.60. The Company paid $100 million to fund the share repurchase using existing cash on hand. The Company accounted for the share repurchase and retirement under the cost method by deducting its par value from the common stock account, reducing $72.0 million from the additional paid-in-capital account using the share price when the stock was originally issued, and the remaining excess cost of $28.0 million by increasing the accumulated deficit account.

14.Equity Incentive Plan

In October 2018, the Company established the Verra Mobility 2018 Equity Incentive Plan (the “2018 Plan”) which provides for a variety of stock-based awards including restricted stock units (“RSUs”), performance share units (“PSUs”) and non-qualified stock options to employees and non-employee directors. The maximum number of shares of the Company’s common stock that may be subject to awards under the 2018 Plan was 10,864,000 as of December 31, 2022, subject to adjustment in accordance with the terms of the 2018 Plan. At December 31, 2022, the Company had an aggregate of 3,388,102 shares of common stock available for future grants under the 2018 Plan.

RSUs and PSUs

The Company’s RSUs consist of a right to receive shares on one or more vesting dates in the future. RSUs granted to employees vest ratably over four years from their individual award dates, subject to continued employment on the applicable vesting dates. RSUs granted to non-employee directors vest on the earlier of (a) the first anniversary of the vesting start date, or (b) the date immediately prior to the next annual stockholders meeting held by the Company occurring after the date of grant.

The Company grants PSUs to senior executives which consist of a right to receive shares at the end of a three-year period. PSUs are issued upon continued service along with the relative satisfaction of a market condition that measures the Company’s total stockholder return relative to a comparably calculated return for a peer group during the performance period. The level at which the performance condition is attained upon the completion of the

91

performance period determines the actual number of shares of the Class A Common Stock into which the PSUs will be converted. The conversion percentage ranges from 0% up to 150% of the target level.

The following table summarizes the activity of the Company’s RSUs and PSUs:

	RSUs					PSUs
	Shares (in thousands)			Weighted Average Grant Date Fair Value		Shares (in thousands)			Weighted Average Grant Date Fair Value
Balance at December 31, 2019		3,004		$	10.28		—		$	—
Granted		576		$	12.12		116		$	13.88
Vested		(986	)	$	10.35		—		$	—
Forfeited		(391	)	$	10.74		(10	)	$	13.88
Balance at December 31, 2020		2,203		$	10.64		106		$	13.88
Granted		736		$	14.12		154		$	16.28
Vested		(1,018	)	$	10.41		—		$	—
Forfeited		(229	)	$	13.40		(31	)	$	16.97
Balance at December 31, 2021		1,692		$	11.92		229		$	15.07
Granted		1,093		$	14.09		179		$	15.58
Vested		(1,030	)	$	11.10		—		$	—
Forfeited		(260	)	$	13.39		(94	)	$	15.17
Balance at December 31, 2022		1,495		$	13.82		314		$	15.33

92

The fair value of RSUs vested during fiscal years 2022, 2021 and 2020 was $11.4 million, $10.6 million and $10.2 million, respectively. There were no PSUs that vested to date. As of December 31, 2022, the Company had $15.4 million and $2.5 million of unrecognized stock-based compensation expense related to unvested RSUs and PSUs, respectively, which is expected to be recognized over a weighted average period of 2.8 years.

Stock Options

Stock options granted vest ratably over four years from their individual award dates, subject to continued employment on the applicable vesting dates, with a contractual term of ten years. The following table summarizes the activity of the Company’s stock options:

	Stock Options Outstanding
	Shares (in thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($ in thousands)
Balance at December 31, 2019		—			—
Granted		720		$	12.56
Exercised		—			—
Forfeited		(106	)	$	12.56
Balance at December 31, 2020		614		$	12.56
Granted		731		$	13.95
Exercised		(12	)	$	12.62		$	36
Forfeited		(170	)	$	14.29
Balance at December 31, 2021		1,163		$	13.18	8.7 years	$	2,636
Granted		846		$	13.97
Exercised		(103	)	$	12.98		$	348
Forfeited		(329	)	$	13.59
Balance at December 31, 2022		1,577		$	13.53	8.5 years	$	619
Exercisable at December 31, 2022		324		$	12.96	7.5 years	$	293
Unvested and expected to vest at December 31, 2022		1,253		$	13.68	8.7 years	$	326

The weighted average fair value of options granted in fiscal years 2020, 2021 and 2022 was $4.36, $6.47 and $6.66 per share, respectively. There were no stock options that vested in fiscal year 2020. There were 141,218 and 324,173 of stock options that vested in fiscal years 2021 and 2022 with a total fair value of $0.6 million and $1.6 million, respectively. The Company received approximately $0.2 million and $1.3 million related to stock options exercised during fiscal years 2021 and 2022, respectively. As of December 31, 2022, the Company had $6.0 million of unrecognized stock-based compensation expense related to unvested stock options which is expected to be recognized over a weighted average period of 2.7 years.

The following details the components of stock-based compensation for the respective periods:

	For the Year Ended December 31,
($ in thousands)	2022		2021		2020
Operating expenses	$	1,130	$	815	$	837
Selling, general and administrative expenses		15,533		12,969		11,752
Total stock-based compensation expense	$	16,663	$	13,784	$	12,589

Tax benefits attributable to stock-based compensation represented approximately $4.6 million, $4.6 million and $2.9 million, before limitations under section 162(m) of the Internal Revenue Code, during the years ended December 31, 2022, 2021 and 2020, respectively.

93

15.Employee Benefit Plan

The Company has a 401(k) plan that covers U.S. employees who meet certain eligibility requirements. Covered employees may elect to have a portion of their compensation withheld up to the statutory limit. The 401(k) plan includes a company match that vests immediately. The Company made employer contributions of $2.5 million, $1.9 million and $1.7 million during the fiscal years ended December 31, 2022, 2021 and 2020, respectively.

The Company also makes superannuation contributions for eligible non-U.S. based employees in accordance with the employer contribution rate set by the applicable country. The expense related to these contributions was $1.7 million and $1.1 million during the fiscal years ended December 31, 2022 and 2021, respectively.

16.Other Significant Transactions

Tax Receivable Agreement

At the closing of the Business Combination, the Company entered into the Tax Receivable Agreement (“Tax Receivable Agreement”) with the Platinum Stockholder. On August 3, 2022, the Platinum Stockholder sold and transferred to Lakeside Smart Holdco L.P.(“Lakeside”), all of its rights, remaining interests and obligations as of that date under the agreement. The Tax Receivable Agreement generally provides for the payment to Lakeside of 50.0% of the net cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the closing of the Business Combination as a result of the increased tax basis of certain acquired intangibles prior to the Business Combination. The Company generally retains the benefit of the remaining 50.0% of these cash savings. The Company estimated the potential maximum benefit to be paid will be approximately $70.0 million, and recorded an initial liability and corresponding charge to equity at the closing of the Business Combination.

At December 31, 2022, the Tax Receivable Agreement liability was approximately $55.9 million of which $5.0 million was the current portion and $50.9 million was the non-current portion, both of which are included in the respective tax receivable agreement liability line items on the consolidated balance sheets. The Company made a $5.1 million payment during the fourth quarter of 2022 related to the 2021 tax year.

The Company recorded tax benefits of $0.7 million and $1.0 million in fiscal years 2022 and 2021, respectively, as a result of lower estimated state tax rates due to changes in apportionment.

Earn-Out Agreement

Under the Merger Agreement, the Platinum Stockholder is entitled to receive additional shares of Class A Common Stock (the “Earn-Out Shares”) if the volume weighted average closing sale price of one share of Class A Common Stock on the Nasdaq exceeds certain thresholds for a period of at least 10 days out of 20 consecutive trading days at any time during the five-year period following the closing of the Business Combination (the “Common Stock Price”).

The Earn-Out Shares are issued by the Company to the Platinum Stockholder as follows:

Common Stock Price Thresholds	One-time Issuance of Shares
> $13.00 (a)	2,500,000
> $15.50 (a)	2,500,000
> $18.00	2,500,000
> $20.50	2,500,000

(a)The first and second tranches of Earn-Out Shares have been issued, as discussed below.

If any of the Common Stock Price thresholds above (each, a “Triggering Event”) are not achieved within the five-year period following the closing of the Business Combination, the Company will not be required to issue the Earn-Out Shares in respect of such Common Stock Price threshold. In no event shall the Platinum Stockholder be entitled to receive more than an aggregate of 10,000,000 Earn-Out Shares.

94

If, during the earn-out period, there is a change of control (as defined in the Merger Agreement) that will result in the holders of the Company's Class A Common Stock receiving a per share price equal to or in excess of the applicable Common Stock Price required in connection with any Triggering Event, then immediately prior to the consummation of such change of control: (a) any such Triggering Event that has not previously occurred shall be deemed to have occurred; and (b) the Company shall issue the applicable Earn-Out Shares to the cash consideration stockholders (as defined in the Merger Agreement) (in accordance with their respective pro rata cash share), and the recipients of the issued Earn-Out Shares shall be eligible to participate in such change of control.

The Company estimated the original fair value of the contingently issuable shares to be $73.15 million, of which $36.6 million remains contingently issuable as of December 31, 2022. The estimated value is not subject to future revisions during the five-year period discussed above. The Company used a Monte Carlo simulation option-pricing model to arrive at its original estimate. Each tranche was valued separately giving specific consideration to the tranche’s price target. The simulation considered volatility and risk-free rates utilizing a peer group based on a five-year term. This was initially recorded as a distribution to shareholders and was presented as common stock contingent consideration. Upon the occurrence of a Triggering Event, any issuable shares are transferred from common stock contingent consideration to common stock and additional paid-in capital accounts. Any contingently issuable shares not issued as a result of a Triggering Event not being attained by the end of the earn-out period will be canceled.

On April 26, 2019 and on January 27, 2020, the Triggering Events for the issuance of the first and second tranches of Earn-Out Shares occurred, as the volume weighted average closing sale price per share of the Company’s Class A Common Stock as of that date had been greater than $13.00 and $15.50, respectively, for 10 out of 20 consecutive trading days. These Triggering Events resulted in the issuance of an aggregate 5,000,000 shares of the Company’s Class A Common Stock to the Platinum Stockholder and an increase in the Company’s common stock and additional paid-in capital accounts of $36.6 million, with a corresponding decrease to the common stock contingent consideration account. At December 31, 2022, the potential future Earn-Out Shares issuable are between zero and 5.0 million.

Related Party Investment

Redflex Irish Investments Pty Ltd, a wholly owned indirect subsidiary of the Company, owns a 16% non-voting equity interest in Road Safety Operations Holdings Unlimited, which has a subsidiary, Road Safety Operations Holdings T/A Go Safe Ireland ("Go Safe"), which provides speed and traffic enforcement services and related equipment to its customers in Ireland. The carrying value of this equity investment was approximately $2.1 million and $3.7 million as of December 31, 2022 and 2021, respectively, and is presented within other non-current assets on the consolidated balance sheets. The Company is engaged as a vendor to supply equipment and services to Go Safe and related revenues earned were approximately $1.0 million and $0.5 million, and dividend income was $0.2 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively.

17.Commitments and Contingencies

The Company has $2.0 million of bank guarantees at December 31, 2022 required to support bids and contracts with certain international customers.

The Company has non-cancelable purchase commitments to certain vendors. The aggregate non-cancelable purchase commitments outstanding at December 31, 2022 were $26.0 million. The majority of these outstanding commitments are expected to be incurred in 2023 and approximately $3.9 million is expected to be incurred between 2024 and 2025.

95

The Company is subject to tax audits in the normal course of business and does not have material contingencies recorded related to such audits.

The Company accrues for claims and contingencies when losses become probable and reasonably estimable. As of the end of each applicable reporting period, the Company reviews each of its matters and, where it is probable that a liability has been or will be incurred, the Company accrues for all probable and reasonably estimable losses. Where the Company can reasonably estimate a range of loss it may incur regarding such a matter, the Company records an accrual for the amount within the range that constitutes its best estimate. If the Company can reasonably estimate a range but no amount within the range appears to be a better estimate than any other, the Company uses the amount that is the low end of such range.

Legal Proceedings

The Company is subject to legal and regulatory actions that arise from time to time in the ordinary course of business. The Company records a liability when it believes it is probable a loss will be incurred, and the amount of loss or range of loss can be reasonably estimated. The assessment as to whether a loss is probable, reasonably possible or remote, and as to whether a loss or a range of such loss is estimable, often involves significant judgment about future events. The Company has determined that resolution of pending matters is not probable to have a material adverse impact on its consolidated results of operations, cash flows, or financial position, and accordingly, no material contingency accruals are recorded. However, the outcome of litigation is inherently uncertain. As additional information becomes available, the Company reassesses the potential liability.

Brantley v. City of Gretna is a class action lawsuit filed in the 24th Judicial District Court of Jefferson Parish, Louisiana against the City of Gretna (“City”) and its safety camera vendor, Redflex Traffic Systems, Inc. in April 2016. The plaintiff class, which was certified on March 30, 2021, alleges that the City’s safety camera program was implemented and operated in violation of local ordinances and the state constitution, including that the City’s hearing process violated the plaintiffs’ due process rights for lack of a “neutral” arbiter of liability for traffic infractions. Plaintiffs seek recovery of traffic infraction fines paid. The City and Redflex Traffic Systems, Inc. appealed the trial court’s ruling granting class certification, which was denied and their petition for discretionary review of the certification ruling by the Louisiana Supreme Court was declined. The matter will return to the trial court for merits discovery. Based on the information available to the Company at present, it cannot reasonably estimate a range of loss for this action and, accordingly, it has not accrued any liability associated with this action.

18.Segment Reporting

The Company has three operating and reportable segments, Commercial Services, Government Solutions and Parking Solutions. Commercial Services offers toll and violation management solutions and title and registration services to commercial fleet vehicle owners, rental car companies and violation-issuing authorities. Government Solutions implements and administers traffic safety programs and products for municipalities and government agencies of all sizes. Parking Solutions provides an integrated suite of parking software and hardware solutions to its customers. The Company’s Chief Operating Decision Maker function (“CODM”) is comprised of the Company’s CEO and certain defined representatives of the Company’s executive management team. The Company’s CODM monitors operating performance, allocates resources and deploys capital based on these three segments.

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. The tables below refer to this measure as segment profit. The aforementioned items are not indicative of operating performance, and, as a result are not included in the measures that are reviewed by the CODM for the segments. Other income, net included in segment profit below consists primarily of credit card rebates earned on the prepayment of tolling transactions and gains or losses on foreign currency transactions, and excludes certain non-operating expenses inapplicable to segments.

The Company allocates certain corporate expenses to the three segments using several different factors depending on the item being allocated. These factors range from specific identification to headcount-based to allocate proportionately between the three segments. The corporate and other columns below include items that are designated by the CODM as corporate initiatives and are not included in segment profit.

96

During the third quarter of 2022, the Company changed its measure of segment profit to include
loss on disposal of assets, net, and to exclude transaction and transformation expenses that were previously included within the selling, general and administrative expenses and other income line items below. The comparable prior periods have been recast to conform to the revised presentation although the impact of this revision to previously reported segment profit was not material.

The Company does not disaggregate assets by segment other than equipment installed at customer sites and automobiles, which had carrying values of $58.3 million and $7.4 million, respectively, at December 31, 2022 and carrying values of $61.8 million and $2.7 million, respectively, at December 31, 2021 all of which relate mainly to the Government Solutions segment. Refer to Note 6, Goodwill and Intangible Assets for goodwill balances by segment.

The following tables set forth financial information by segment for the fiscal years ended December 31, 2022, 2021 and 2020:

	For the Year Ended December 31, 2022
	Commercial			Government			Parking			Corporate
($ in thousands)	Services			Solutions			Solutions			and Other			Total
Service revenue	$	325,971		$	307,639		$	61,608		$	—		$	695,218
Product sales		—			29,028			17,352			—			46,380
Total revenue		325,971			336,667			78,960			—			741,598
Cost of service revenue		2,869			2,016			11,445			—			16,330
Cost of product sales		—			17,436			13,496			—			30,932
Operating expenses		72,328			139,961			12,905			—			225,194
Selling, general and administrative expenses		56,105			61,235			27,104			—			144,444
Loss on disposal of assets, net		522			931			37			—			1,490
Other income, net		(14,387	)		(679	)		(266	)		—			(15,332	)
Segment profit	$	208,534		$	115,767		$	14,239		$	—		$	338,540
Segment profit	$	208,534		$	115,767		$	14,239		$	—		$	338,540
Depreciation and amortization		—			—			—			138,684			138,684
Transaction and other related expenses		—			—			—			3,381			3,381
Transformation expenses		—			—			—			1,113			1,113
Change in fair value of private placement warrants		—			—			—			(14,400	)		(14,400	)
Tax receivable agreement liability adjustment		—			—			—			(720	)		(720	)
Gain on interest rate swap		—			—			—			(996	)		(996	)
Stock-based compensation		—			—			—			16,663			16,663
Impairment on a privately-held equity investment		—			1,340			—			—			1,340
Gain on extinguishment of debt		—			—			—			(3,005	)		(3,005	)
Interest expense, net		—			—			—			69,372			69,372
Income before income taxes	$	208,534		$	114,427		$	14,239		$	(210,092	)	$	127,108

97

	For the Year Ended December 31, 2021
	Commercial			Government			Parking			Corporate
($ in thousands)	Services			Solutions			Solutions			and Other			Total
Service revenue	$	260,899		$	227,992		$	3,955		$	—		$	492,846
Product sales		—			55,163			2,581			—			57,744
Total revenue		260,899			283,155			6,536			—			550,590
Cost of service revenue		3,183			1,500			654			—			5,337
Cost of product sales		—			28,381			1,428			—			29,809
Operating expenses		65,718			96,284			553			—			162,555
Selling, general and administrative expenses		42,386			51,052			1,361			—			94,799
Loss on disposal of assets, net		—			48			—			—			48
Other income, net		(10,837	)		(2,040	)		(18	)		—			(12,895	)
Segment profit	$	160,449		$	107,930		$	2,558		$	—		$	270,937
Segment profit	$	160,449		$	107,930		$	2,558		$	—		$	270,937
Depreciation and amortization		—			—			—			116,753			116,753
Transaction and other related expenses		—			—			—			13,952			13,952
Transformation expenses		—			—			—			1,687			1,687
Change in fair value of private placement warrants		—			—			—			7,600			7,600
Tax receivable agreement liability adjustment		—			—			—			(1,016	)		(1,016	)
Stock-based compensation		—			—			—			13,784			13,784
Loss on extinguishment of debt		—			—			—			5,334			5,334
Interest expense, net		—			—			—			44,942			44,942
Income before income taxes	$	160,449		$	107,930		$	2,558		$	(203,036	)	$	67,901

	For the Year Ended December 31, 2020
	Commercial			Government			Corporate
($ in thousands)	Services			Solutions			and Other			Total
Service revenue	$	180,856		$	155,418		$	—		$	336,274
Product sales		—			57,319			—			57,319
Total revenue		180,856			212,737			—			393,593
Cost of service revenue		2,562			1,405			—			3,967
Cost of product sales		—			29,573			—			29,573
Operating expenses		52,505			62,387			—			114,892
Selling, general and administrative expenses		40,462			34,465			—			74,927
Loss on disposal of assets, net		16			258			—			274
Other income, net		(11,774	)		(111	)		—			(11,885	)
Segment profit	$	97,085		$	84,760		$	—		$	181,845
Segment profit	$	97,085		$	84,760		$	—		$	181,845
Depreciation and amortization		—			—			116,570			116,570
Transaction and other related expenses		—			—			1,895			1,895
Transformation expenses		—			—			1,090			1,090
Change in fair value of private placement warrants		—			—			1,133			1,133
Tax receivable agreement liability adjustment		—			—			6,850			6,850
Stock-based compensation		—			—			12,589			12,589
Interest expense, net		—			—			40,865			40,865
Income before income taxes	$	97,085		$	84,760		$	(180,992	)	$	853

98

The Company primarily operates within the United States, Australia, Canada, United Kingdom and in various other countries in Europe and Asia. Revenues earned from goods transferred to customers at a point in time were approximately $46.4 million, $57.7 million and $57.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. Property and equipment, net located in foreign countries was $17.3 million as of December 31, 2022, of which Canada represented $8.9 million and Australia represented $6.0 million. Property and equipment, net located in foreign countries was $14.8 million as of December 31, 2021, of which Canada represented $6.7 million and Australia represented $6.1 million.

The following table details the revenues from international operations for the respective periods:

	For the Year Ended December 31,
($ in thousands)	2022		2021		2020
Australia	$	34,356	$	13,948	$	—
Canada		32,413		6,874		—
United Kingdom		24,017		16,346		12,007
All other		3,532		2,809		1,295
Total international revenues	$	94,318	$	39,977	$	13,302

19.Guarantor/Non-Guarantor Financial Information (Unaudited)

VM Consolidated is the lead borrower of the 2021 Term Loan and Senior Notes. VM Consolidated is owned by the Company through a series of holding companies that ultimately end with the Company. VM Consolidated is wholly owned by Greenlight Acquisition Corporation, which is wholly owned by Greenlight Intermediate Holding Corporation, which is wholly owned by Greenlight Holding Corporation, which is wholly owned by Verra Mobility Holdings, LLC, which is wholly owned by Verra Mobility Corporation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, including transactions with the Company’s wholly owned guarantor subsidiaries and non-guarantor subsidiaries.

The following financial information presents the consolidated balance sheets as of December 31, 2022 and the related consolidated statements of operations and comprehensive income (loss) and the consolidated statements of cash flows for the year ended December 31, 2022 for the Company, the combined guarantor subsidiaries and the combined non-guarantor subsidiaries.

99

Verra Mobility Corporation and Subsidiaries

Consolidated Balance Sheets

at December 31, 2022

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	64,979	$	40,225	$	—		$	105,204
Restricted cash		—		3,863		48		—			3,911
Accounts receivable (net of allowance for credit losses of $15.9 million)		—		151,882		11,904		—			163,786
Unbilled receivables		—		25,342		5,440		—			30,782
Investment in subsidiary		61,811		145,370		—		(207,181	)		—
Inventory		—		1,976		17,331		—			19,307
Prepaid expenses and other current assets		—		32,869		6,735		—			39,604
Total current assets		61,811		426,281		81,683		(207,181	)		362,594
Installation and service parts, net		—		22,923		—		—			22,923
Property and equipment, net		—		92,434		17,341		—			109,775
Operating lease assets		—		30,939		6,654		—			37,593
Intangible assets, net		—		276,477		100,943		—			377,420
Goodwill		—		689,697		143,783		—			833,480
Due from affiliates		169,259		—		—		(169,259	)		—
Other non-current assets		—		9,657		2,827		—			12,484
Total assets	$	231,070	$	1,548,408	$	353,231	$	(376,440	)	$	1,756,269
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	—	$	58,574	$	21,295	$	—		$	79,869
Deferred revenue		—		20,353		10,811		—			31,164
Accrued liabilities		—		37,740		11,107		—			48,847
Tax receivable agreement liability, current portion		—		4,994		—		—			4,994
Current portion of long-term debt		—		21,935		—		—			21,935
Total current liabilities		—		143,596		43,213		—			186,809
Long-term debt, net of current portion		—		1,190,045		—		—			1,190,045
Operating lease liabilities, net of current portion		—		28,856		4,506		—			33,362
Tax receivable agreement liability, net of current portion		—		50,900		—		—			50,900
Private placement warrant liabilities		—		24,066		—		—			24,066
Asset retirement obligations		—		12,942		51		—			12,993
Due to affiliates		—		30,386		138,873		(169,259	)		—
Deferred tax liabilities, net		—		—		21,149		—			21,149
Other long-term liabilities		—		5,806		69		—			5,875
Total liabilities		—		1,486,597		207,861		(169,259	)		1,525,199
Total stockholders' equity		231,070		61,811		145,370		(207,181	)		231,070
Total liabilities and stockholders' equity	$	231,070	$	1,548,408	$	353,231	$	(376,440	)	$	1,756,269

100

Verra Mobility Corporation and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2022

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Service revenue	$	—		$	620,605		$	74,613		$	—		$	695,218
Product sales		—			26,675			19,705			—			46,380
Sales to affiliates		—			(1,788	)		1,788			—			—
Total revenue		—			645,492			96,106			—			741,598
Cost of service revenue		—			11,047			5,283			—			16,330
Cost of product sales		—			15,507			15,425			—			30,932
Cost of sales to affiliates		—			(10	)		10			—			—
Operating expenses		—			186,778			39,546			—			226,324
Selling, general and administrative expenses		—			139,565			23,568			—			163,133
Depreciation, amortization and (gain) loss on disposal of assets, net		—			119,617			20,557			—			140,174
Total costs and expenses		—			472,504			104,389			—			576,893
Income (loss) from operations		—			172,988			(8,283	)		—			164,705
Income from equity investment		(92,475	)		4,039			—			88,436			—
Interest expense, net		—			70,652			(1,280	)		—			69,372
Change in fair value of private placement warrants		—			(14,400	)		—			—			(14,400	)
Tax receivable agreement liability adjustment		—			(720	)		—			—			(720	)
Gain on interest rate swap		—			(996	)		—			—			(996	)
Gain on extinguishment of debt		—			(3,005	)		—			—			(3,005	)
Other income, net		—			(10,794	)		(1,860	)		—			(12,654	)
Total other (income) expenses		(92,475	)		44,776			(3,140	)		88,436			37,597
Income (loss) before income taxes		92,475			128,212			(5,143	)		(88,436	)		127,108
Income tax provision (benefit)		—			35,737			(1,104	)		—			34,633
Net income (loss)	$	92,475		$	92,475		$	(4,039	)	$	(88,436	)	$	92,475
Other comprehensive loss:
Change in foreign currency translation adjustment		—			—			(7,771	)		—			(7,771	)
Total comprehensive income (loss)	$	92,475		$	92,475		$	(11,810	)	$	(88,436	)	$	84,704

101

Verra Mobility Corporation and Subsidiaries

Consolidated Statements of Cash Flows

Year Ended December 31, 2022

102

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Cash Flows from Operating Activities:
Net income (loss)	$	92,475		$	92,475		$	(4,039	)	$	(88,436	)	$	92,475
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		—			118,127			20,557			—			138,684
Amortization of deferred financing costs and discounts		—			5,472			—			—			5,472
Change in fair value of private placement warrants		—			(14,400	)		—			—			(14,400	)
Tax receivable agreement liability adjustment		—			(720	)		—			—			(720	)
Gain on interest rate swap		—			(996	)		—			—			(996	)
Gain on extinguishment of debt		—			(3,005	)		—			—			(3,005	)
Credit loss expense		—			13,744			737			—			14,481
Deferred income taxes		—			(15,473	)		(1,882	)		—			(17,355	)
Stock-based compensation		—			16,663			—			—			16,663
Impairment on a privately-held equity investment		—			1,340			—			—			1,340
Other		—			1,654			—			—			1,654
Income from equity investment		(92,475	)		4,039			—			88,436			—
Changes in operating assets and liabilities:
Accounts receivable		—			(15,445	)		(2,240	)		—			(17,685	)
Unbilled receivables		—			(1,123	)		(813	)		—			(1,936	)
Inventory		—			(3,510	)		(6,800	)		—			(10,310	)
Prepaid expenses and other assets		—			529			3,777			—			4,306
Deferred revenue		—			3,433			1,158			—			4,591
Accounts payable and other current liabilities		—			2,408			4,105			—			6,513
Due to affiliates		—			7			(7	)		—			—
Other liabilities		—			(581	)		(854	)		—			(1,435	)
Net cash provided by operating activities		—			204,638			13,699			—			218,337
Cash Flows from Investing Activities:
Payment of contingent consideration		—			(647	)		—			—			(647	)
Purchases of installation and service parts and property and equipment		—			(39,447	)		(8,739	)		—			(48,186	)
Cash proceeds from the sale of assets		—			241			—			—			241
Net cash used in investing activities		—			(39,853	)		(8,739	)		—			(48,592	)
Cash Flows from Financing Activities:
Repayment on revolver		—			(25,000	)		—			—			(25,000	)
Repayment of long-term debt		—			(9,019	)		—			—			(9,019	)
Payment of debt issuance costs		—			(447	)		—			—			(447	)
Share repurchases and retirement		—			(125,071	)		—			—			(125,071	)
Proceeds from exercise of stock options		—			1,334			—			—			1,334
Payment of employee tax withholding related to RSUs vesting		—			(6,524	)		—			—			(6,524	)
Payment of contingent consideration		—			(205	)		—			—			(205	)
Net cash used in financing activities		—			(164,932	)		—			—			(164,932	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(130	)		—			(130	)

103

Net (decrease) increase in cash, cash equivalents and restricted cash		—		(147	)		4,830		—		4,683
Cash, cash equivalents and restricted cash - beginning of period		—		68,989			35,443		—		104,432
Cash, cash equivalents and restricted cash - end of period	$	—	$	68,842		$	40,273	$	—	$	109,115

104

Verra Mobility Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

Year Ended December 31, 2022

	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations		Consolidated
Supplemental cash flow information:
Interest paid	$	—	$	63,663	$	—	$	—	$	63,663
Income taxes paid, net of refunds		—		46,326		1,297		—		47,623
Supplemental non-cash investing and financing activities:
Additions related to asset retirement obligations, property and equipment, and other		—		946		—		—		946
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		—		10,421		—		—		10,421

105

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 (e) and 15d-15(e) of the Exchange Act. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that our management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of December 31, 2022, our disclosure controls and procedures are designed to ensure that information required to be disclosed in our periodic reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.


Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of our assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2022. The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by our independent registered public accounting firm, Ernst & Young LLP, as stated in its report included in Item 8 of this Annual Report on Form 10-K.


Inherent Limitations on the Effectiveness of Controls

Because of inherent limitations in all control systems, no internal control over financial reporting can prevent or detect all misstatements, and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

106

Changes in Internal Control over Financing Reporting

We fully incorporated Redflex Holdings LLC and T2 Systems into our internal control framework during the year ended December 31, 2022. Other than the remediation and transition described below, there were no changes to our internal control over financial reporting that occurred during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As described in our Annual Report on Form 10-K for the year ended December 31, 2021, we identified material weaknesses in our internal control over financial reporting related to monitoring and control activities over the acquisition of Redflex Holdings Limited, and certain revenue and reporting controls related to a third-party service organization. Following the discovery of the material weaknesses described above, we undertook remediation measures to address such material weaknesses. Based on the implementation work and the results of testing performed, our management concluded that the material weaknesses were remediated as of December 31, 2022.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

107

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item is incorporated by reference from our Proxy Statement to be filed in connection with our 2023 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2022.

Item 11. Executive Compensation

The information required by this Item is incorporated by reference from our Proxy Statement to be filed in connection with our 2023 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2022.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is incorporated by reference from our Proxy Statement to be filed in connection with our 2023 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2022.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated by reference from our Proxy Statement to be filed in connection with our 2023 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2022.

Item 14. Principal Accountant Fees and Services

The information required by this Item is incorporated by reference from our Proxy Statement to be filed in connection with our 2023 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2022.

108

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)The following documents are filed as part of this Annual Report:

1.Consolidated Financial Statements

The financial statements filed as part of this Annual Report are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8 of this Annual Report.

2.Financial Statement Schedules

•Appendix A, Schedule II – Consolidated Valuation and Qualifying Accounts

Schedules not listed above are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or notes to the consolidated financial statements under Part II, Item 8 of this Annual Report.

3.Exhibits.

The exhibits listed below are filed as part of this Annual Report. References under the caption “Incorporated by Reference” to exhibits or other filings indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit referred to is incorporated by reference.

109

EXHIBIT INDEX

		Incorporated by Reference
Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
2.1	Merger Agreement, dated as of June 21, 2018, by and among Gores Holdings II, Inc., AM Merger Sub I, Inc., AM Merger Sub II, LLC, Greenlight Holding II Corporation and PE Greenlight Holdings, LLC, in its capacity as the Stockholder Representative.	8-K	001-37979	2.1	June 21, 2018
2.2	Amendment No. 1 to Agreement and Plan of Merger, dated as of August 23, 2018, by and among Gores Holdings II, Inc., AM Merger Sub I, Inc., AM Merger Sub II, LLC, Greenlight Holding II Corporation and PE Greenlight Holdings, LLC, in its capacity as the Stockholder Representative.	8-K	001-37979	2.2	Aug. 24, 2018
3.1	Second Amended and Restated Certificate of Incorporation of Verra Mobility Corporation.	8-K	001-37979	3.1	Oct. 22, 2018
3.2	Amended and Restated Bylaws of Verra Mobility Corporation.	8-K	001-37979	3.2	Oct. 22, 2018
4.1	Specimen Class A Common Stock Certificate.	S-1	333-21503	4.2	Dec. 9, 2016
4.2	Specimen Warrant Certificate.	S-1	333-21503	4.3	Dec. 9, 2016
4.3	Warrant Agreement, dated January 12, 2017, between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent.	8-K	001-37979	4.1	Jan. 19, 2017
4.4	First Amendment to Warrant Agreement, dated January 15, 2020, by and among the Registrant, Continental Stock Transfer & Trust Company and American Stock Transfer & Trust Company.	10-K	001-37979	4.4	Mar. 2, 2020
4.5	Description of Verra Mobility Corporation’s Securities Registered Pursuant to Section 12 of the Exchange Act.	10-K	001-37979	4.5	Mar. 2, 2020
4.6	Indenture, dated as of March 26, 2021, by and among VM Consolidated, Inc., the Guarantors party thereto and Wilmington Trust, National Association as Trustee.	8-K	001-37979	4.1	Mar. 29, 2021
4.7	Form of 5.5% Senior Note Due 2029 (included in Exhibit 4.6).	8-K	001-37979	4.2	Mar. 29, 2021

110

10.1	Form of Indemnity Agreement.	S-1	333-21503	10.7	Dec. 9, 2016
10.2	Amended and Restated Registration Rights Agreement dated October 17, 2018, by and among Verra Mobility Corporation, Gores Sponsor II LLC, Randall Bort, William Patton, Jeffrey Rea and the stockholders of Greenlight Holding II Corporation.	8-K	001-37979	10.2	Oct. 22, 2018
10.3	Investor Rights Agreement dated October 17, 2018, by and among Verra Mobility Corporation and PE Greenlight Holdings, LLC.	8-K	001-37979	10.3	Oct. 22, 2018
10.4	Tax Receivable Agreement dated October 17, 2018, by and among Verra Mobility Corporation, the persons identified as “Stockholders” on Schedule 1 thereto, and PE Greenlight Holdings, LLC, solely in its capacity as the stockholders’ representative thereunder.	8-K	001-37979	10.4	Oct. 22, 2018
10.5	Revolving Credit Agreement dated as of March 1, 2018, among Greenlight Acquisition Corporation, ATS Consolidated Inc., each of the other borrowers party thereto, the lenders party thereto and Bank of America, N.A. as Administrative Agent and Collateral Agent.	8-K	001-37979	10.5	Oct. 22, 2018
10.6	Amendment No. 1 to Revolving Credit Agreement, dated as of July 24, 2018, among Greenlight Acquisition Corporation, VM Consolidated, Inc. (formerly known as ATS Consolidated Inc.), each of the other borrowers party thereto, the lenders party thereto and Bank of America, N.A. as Administrative Agent and Collateral Agent.	8-K	001-37979	10.7	Oct. 22, 2018
10.7	Amendment No. 2 to Revolving Credit Agreement, dated as of October 29, 2021, by and among Greenlight Acquisition Corporation, VM Consolidated, Inc., each of the other borrowers party thereto, the lenders party thereto and Bank of America, N.A. as Administrative Agent and Collateral Agent.	10-K	001-37979	10.7	April 22, 2022
10.8	Amendment No. 3 to Revolving Credit Agreement, dated as of December 20, 2021, by and among Greenlight Acquisition Corporation, VM Consolidated, Inc., each of the other borrowers party thereto, the lenders party thereto and Bank of America, N.A. as	8-K	001-37979	10.1	Dec. 20, 2021

111

	Administrative Agent and Collateral Agent.
10.9	Amendment and Restatement Agreement No. 1 to First Lien Term Loan Credit Agreement, dated as of March 26, 2021, by and among Greenlight Acquisition Corporation, VM Consolidated, Inc., American Traffic Solutions, Inc., Lasercraft, Inc. the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent and Collateral Agent.	8-K	001-37979	10.1	Mar. 29, 2021
10.10	Amendment No. 1 to Amendment and Restatement Agreement No. 1 to First Lien Term Loan Credit Agreement, dated as of March 26, 2021, by and among Greenlight Acquisition Corporation, VM Consolidated, Inc., American Traffic Solutions, Inc., Lasercraft, Inc. the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent and Collateral Agent.	8-K	001-37979	10.1	Dec. 7, 2021
10.11#	Amended and Restated Executive Employment Agreement, dated as of March 25, 2021, by and between VM Consolidated, Inc. and David Roberts.	10-Q	001-37979	10.3	May 17, 2021
10.12#	Amended and Restated Executive Employment Agreement, dated as of March 25, 2021, by and between VM Consolidated, Inc. and Patricia Chiodo.	10-Q	001-37979	10.4	May 17, 2021
10.13#	Amended and Restated Executive Employment Agreement, dated as of March 25, 2021, by and between VM Consolidated, Inc. and Rebecca Collins.	10-Q	001-37979	10.5	May 17, 2021
10.14#	Executive Employment Agreement by and between VM Consolidated, Inc. and Steven Lalla, dated as of January 31, 2021.	10-K	001-37979	10.15	Mar. 1, 2021
10.15#	Executive Employment Agreement by and between VM Consolidated, Inc. and Craig Conti, dated as of January 29, 2022.	10-K	001-37979	10.15	April 22, 2022
10.16#	Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.17	Oct. 22, 2018
10.17#	Form of Notice of Grant of Restricted Stock Unit and Agreement under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.18	Oct. 22, 2018

112

10.18#	Form of Notice of Grant of Restricted Stock Unit and Agreement for Non-U.S. Participants under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.19	Oct. 22, 2018
10.19#	Form of Greenlight Holding Corporation 2018 Participation Plan Termination Agreement.	8-K	001-37979	10.20	Oct. 22, 2018
10.20#	Form of Notice of Grant of Restricted Stock Unit for Non-Employee Directors under the Verra Mobility Corporation 2018 Equity Incentive Plan.	10-K	001-37979	10.30	Mar. 18, 2019
10.21#	Form of Notice of Grant of Stock Option and Agreement under the Verra Mobility Corporation 2018 Equity Incentive Plan.	10-K	001-37979	10.24	Mar. 2, 2020
10.22#	Form of Notice of Grant of Performance Share Unit and Agreement under the Verra Mobility Corporation 2018 Equity Incentive Plan.	10-K	001-37979	10.26	Mar. 2, 2020
10.23#	2020 Form of Notice of Grant of Restricted Stock Unit and Agreement for Non-U.S. Participants under the Verra Mobility Corporation 2018 Equity Incentive Plan.	10-Q	001-37979	10.1	Nov. 5, 2020
10.24#	Form of Notice of Grant of Stock Option and Agreement for Non-U.S. Participants under the Verra Mobility Corporation 2018 Equity Incentive Plan.	10-Q	001-37979	10.2	Nov. 5, 2020
10.25#	Amended and Restated Verra Mobility Corporation Short-Term Incentive Plan.	8-K	001-37979	10.1	April 28, 2022
10.26#	Verra Mobility Corporation Non-Employee Director Compensation Policy.					X
10.27#	Separation and Release Agreement, between Patricia Chiodo and Verra Mobility Corporation, dated April 11, 2022.	10-Q	001-37979	10.1	May 9, 2022
10.28#	Form of Notice of Grant of Performance Share Units and Award Agreement under the Verra mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.1	June 1, 2022
10.29#	Separation and Release Agreement, between Rebecca Collins and Verra Mobility Corporation, dated August 29, 2022.	10-Q	001-37979	10.1	Nov. 2, 2022
10.30#	Executive Employment Agreement by and between VM Consolidated, Inc. and Jonathan Baldwin, dated as of January 16, 2022.					X

113

10.31#	Amended and Restated Executive Employment Agreement by and between VM Consolidated, Inc. and Adam Blake, dated as of October 20, 2021.					X
10.32#	Executive Employment Agreement by and between VM Consolidated, Inc. and Jonathan Keyser, dated as of November 8, 2022.					X
10.33#	Form of Notice of Grant of Restricted Stock Units (U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.1	Feb. 17, 2023
10.34#	Form of Notice of Grant of Restricted Stock Units (Non-U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.2	Feb. 17, 2023
10.35#	Form of Notice of Grant of Stock Option (U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.3	Feb. 17, 2023
10.36#	Form of Notice of Grant of Stock Option (Non-U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.4	Feb. 17, 2023
10.37#	Form of Notice of Grant of Performance Share Units and Award Agreement (U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.5	Feb. 17, 2023
10.38#	Form of Notice of Grant of Performance Share Units and Award Agreement (Non-U.S. Participants) under the Verra Mobility Corporation 2018 Equity Incentive Plan.	8-K	001-37979	10.6	Feb. 17, 2023
10.39#	Verra Mobility Corporation Second Amended and Restated Short-Term Incentive Plan.	8-K	001-37979	10.7	Feb. 17, 2023
21.1	List of Subsidiaries.					X
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.					X
24.1	Power of Attorney (included on the signature pages herein).					X
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X

114

31.2	Certification of Principal Financial Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
99.1	Verra Mobility Insider Trading Policy.	X
101.INS	Inline XBRL Instance Document.	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	X
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document.	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase document.	X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	X

# Management contract or compensatory plan or arrangement.

* This certification is deemed not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

Item 16. Form 10-K Summary

None.

115

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VERRA MOBILITY CORPORATION
Date: March 1, 2023	By:	/s/ David Roberts
		David Roberts
		President and Chief Executive Officer
		(Principal Executive Officer)

116

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints David Roberts and Craig Conti, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated:

Signature		Capacity in Which Signed	Date
/s/ David Roberts		President, Chief Executive Officer and Director	March 1, 2023
David Roberts	(Principal Executive Officer)
/s/ Craig Conti		Chief Financial Officer	March 1, 2023
Craig Conti	(Principal Financial and Accounting Officer)
/s/ Patrick Byrne		Director	March 1, 2023
Patrick Byrne
/s/ Douglas Davis		Director	March 1, 2023
Douglas Davis
/s/ Sarah Farrell		Director	March 1, 2023
Sarah Farrell
/s/ Michael Huerta		Director	March 1, 2023
Michael Huerta
/s/ John Rexford		Director	March 1, 2023
John Rexford
/s/ Cynthia Russo		Director	March 1, 2023
Cynthia Russo

117

Appendix A

Verra Mobility Corporation

Schedule II

Consolidated Valuation and Qualifying Accounts for the Years Ended December 31, 2022, 2021 and 2020

	Beginning		Charged/Credited to		Charged to Other		Charges Utilized/			Ending
($ in thousands)	Balance		Net Income (Loss)		Account		Write-offs			Balance
Allowance for Credit Losses
Year Ended December 31, 2022	$	12,138	$	14,481	$	—	$	(10,712	)	$	15,907
Year Ended December 31, 2021		11,471		9,588		—		(8,921	)		12,138
Year Ended December 31, 2020 (1)		8,456		14,391		—		(11,376	)		11,471
Tax Valuation Allowance
Year Ended December 31, 2022	$	3,785	$	2,438	$	63	$	(1,023	)	$	5,263
Year Ended December 31, 2021		3,422		363		—		—			3,785
Year Ended December 31, 2020		2,564		858		—		—			3,422

(1)This includes a $0.8 million increase to the beginning balance of allowance for credit losses as a result of adopting the credit loss standard.

118

EX-10

Exhibit 10.26

VERRA MOBILITY CORPORATION

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

Last updated December 8, 2022

Each member of the board of directors (the “Board”) of Verra Mobility Corporation, a Delaware corporation (the “Company”) who is not an employee of the Company or subsidiary of the Company (each “Non-Employee Director”) shall be subject to, and eligible to receive cash and equity compensation for their service on the Board and any committee thereof (“Committee”) in accordance with this Non-Employee Director Compensation Policy (the “Policy”). For the avoidance of doubt, the Policy shall not apply to members of the Board who are employees of the Company or any subsidiary of the Company. This Policy shall remain in effect until it is amended or rescinded by further action of the Board.

General

This Policy shall be followed in connection with all compensation paid by the Company to Non-Employee Directors, including, without limitation, amounts paid or awards granted under The Verra Mobility 2018 Equity Incentive Plan (the “Plan”). Non-Employee Directors shall not be entitled to any compensation for their service on the Board other than as described in this Policy and the Plan.

Cash Compensation

Each Non-Employee Director shall be entitled to the following cash compensation:

Annual Cash Retainers

Each Non-Employee Director shall receive an annual cash retainer of $65,000 for their service on the Board.

The Non-Executive Chairman of the Board shall receive an additional cash retainer of $70,000.

The Chairman of any Committee shall receive an additional annual cash retainer as follows:

·Chairman of the Audit Committee: 12,500.

·Chairman of the Compensation Committee: $10,000.

·Chairman of the Nominating and Corporate Governance Committee: $6,000.

Members of each Committee shall receive additional annual cash retainers as follows:

·Member of the Audit Committee (other than the Chairman): $10,000.

·Member of the Compensation Committee (other than the Chairman): $7,500.

·Member of the Nominating and Corporate Governance Committee (other than the Chairman): $4,000.

1

Each Non-Employee Director who serves on the Board or a Committee for less than a full quarterly period shall receive a prorated portion of the annual cash retainer for such quarterly period, determined based on the number of days served during the quarterly period.

The annual cash retainers, including any pro rata portion thereof, shall be paid either annually, in arrears, or quarterly in arrears at the election of the respective Non-Employee Director.

Equity Compensation

Annual Equity Grant

On the close of business on the date of each annual stockholders meeting of the Company, without further action by the Board, each Non-Employee Director then in office shall receive an equity award (the “Annual Award”). The Annual Award will have an estimated fair value of $170,000 using valuation methodologies deemed appropriate by the Compensation Committee of the Board or the Board from time to time, in light of commercial considerations deemed necessary to fulfill the goals set forth in this Policy and to align directors with stockholder interests. The Annual Award will be comprised of Restricted Stock Units which will vest in full upon the earlier of (i) the first anniversary of the vesting start date or (ii) the date immediately prior to the Company’s next annual meeting of stockholders.

Each Non-Employee Director who is appointed to the Board during the year shall be entitled to a pro-rated annual equity award, determined based on the number of days between the date the Non-Employee Director joins the Board and the anticipated date of the next annual shareholders meeting.

All equity awards will be made in accordance with the Plan and other applicable equity plan documents, including forms of award agreements approved by the Board for grants to Non-Employee Directors consistent with this Policy.

Travel Expense Reimbursement

Each Non-Employee Director shall be reimbursed for reasonable travel expenses in connection with their attendance at Board and Committee meetings. Each Non-Employee Director shall provide the Company with such receipts and other records related to such reimbursable expenses as the Company may require. Reimbursements shall be paid in accordance with the payment requirements set out in the Plan.

Insider Trading

Non-Employee Directors are subject to the Company’s Insider Trading Policy.

Hedging Stock Ownership

Non-Employee Directors are prohibited from entering into hedging transactions or similar arrangements regarding their Company securities pursuant to the Company’s Insider Trading Policy.

Interpretation

The Compensation Committee is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate or advisable for the administration of this Policy. Any interpretation made by the Compensation Committee shall be final, conclusive and binding.

Review of Policy

2

The Compensation Committee shall review this Policy at least annually and may recommend any modifications to the Board. The Board will determine any changes to be made to this Policy based on the Compensation Committee’s recommendations.

Adopted by the Board of Directors of Verra Mobility Corporation on February 17, 2022

3

EX-10

Exhibit 10.30

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by and between VM Consolidated, Inc., a Delaware corporation having its principal offices in Mesa, Arizona and a wholly owned subsidiary of Verra Mobility Corporation (together with Verra Mobility Corporation, the “Company”), and Jonathan Baldwin (the “Executive”). This Agreement shall become effective on the date of the last signatory hereto, provided, however, that the Agreement is fully executed by January 17, 2022. If the Agreement is not fully executed by January 17, 2022, it shall become null and void.

WHEREAS, the Company desires to employ Executive as its Executive Vice President, Government Solutions, and Executive desires to serve in such capacity on behalf of the Company, upon the terms and conditions hereinafter set forth; and

WHEREAS, Executive acknowledges that he has had an opportunity to consider this Agreement and to consult with an independent advisor of his choosing with regard to the terms of this Agreement and enters into this Agreement voluntarily and with a full understanding of its terms.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1.Employment.

1.1Employment Period. Executive’s employment hereunder will commence on or before April 4, 2022 (the “Start Date”). Executive shall be employed by the Company (or a Company subsidiary or affiliate) on an “at will” basis, meaning either the Company or Executive may terminate Executive’s employment at any time, with or without cause or advance notice (such period of employment under this Agreement, the “Employment Period”). Any contrary representations that may have been made to Executive shall be superseded by this Agreement. This Agreement shall constitute the full and complete agreement between Executive and the Company on the “at will” nature of Executive’s employment with the Company, which may be changed only in an express written agreement signed by Executive and a duly authorized officer of the Company. Executive’s rights to any compensation following a termination shall be only as set forth in Section 3 herein.

1.2Public Announcement. Prior to any public announcement made by the Company, Executive shall not make any public release, statement or communication concerning Executive’s acceptance of employment with the Company without the prior written approval of the Company’s Board of Directors (the “Board”) or its designee.

1.3Duties and Responsibilities. Commencing on the Start Date, Executive shall serve as the Executive Vice President, Government Solutions of the Company, reporting to the

_______

Executive’s Initials

Company’s Chief Executive Officer, and shall perform all duties and accept all responsibilities incident to such position and such other duties as may be reasonably assigned to Executive by the Company’s Chief Executive Officer consistent with such position.

1.4Extent of Services. Executive shall use his best efforts to carry out Executive’s duties and responsibilities under Section 1.3 hereof and, consistent with the other provisions of this Agreement, shall devote substantially all of Executive’s business time, attention and energy thereto. In the performance of his duties, Executive shall observe and adhere to all applicable Company policies and procedures as may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion. During the Employment Period, Executive may engage in volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable organization as Executive may wish to serve, in all such cases not interfering with Executive’s responsibilities and performance of Executive’s duties hereunder. The foregoing shall not be construed as preventing Executive from owning less than one percent (1%) of the total outstanding shares of a publicly traded company.

1.5Principal Location of Services. Executive shall be permitted to telecommute from his current home location in the performance of his duties, and shall undertake travel within or outside of the United States as is necessary or advisable for the efficient operations of the Company and the performance of Executive’s duties hereunder, including such travel as is required to the Company’s corporate headquarters (presently located in Mesa, Arizona). Executive shall be reimbursed for his travel expenses in accordance with the Company’s Travel & Expense Policy. .

1.6Background Screening. Executive’s employment is contingent upon completion of the Company’s Director & Officer Questionnaire to the Company’s satisfaction, verification of Executive’s eligibility to work in the United States, and the Company obtaining satisfactory results on a background investigation, reference check, and drug screening of Executive (collectively, the “Background Check”), which will be conducted at the Company’s expense and in compliance with applicable law. If the results of Executive’s Background Check do not meet the Company’s satisfaction, the Agreement shall be null and void (even if executed by the Parties).

2.Compensation and Benefits.

2.1Base Salary. For all the services rendered by Executive hereunder, the Company shall pay or cause to be paid to Executive a base salary (“Base Salary”) at the annualized rate of Three Hundred Eighty-Five Thousand Dollars ($385,000.00), subject to all required withholdings and authorized deductions and payable in installments at such times as the Company customarily pays its other senior level executives. Executive’s Base Salary is subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”) consistent with other members of the Company’s executive team.

_______

Executive’s Initials

2.2Short-Term Discretionary Cash Bonus.For each fiscal year during the Employment Period, Executive shall be eligible to receive an annual discretionary cash bonus (the “STIPBonus”) for the services rendered by Executive under this Agreement, subject to the terms and conditions as set forth in the Verra Mobility Short-Term Incentive Plan (or any successor plan) (the “STIP Plan”). Executive’s STIP Bonus target shall be seventy five percent (75%) of the Executive’s Base Salary paid during the applicable plan year. The payment and amount of the STIP Bonus, if any, will be determined by the Compensation Committee based on Executive’s performance and Company financial performance, in each case measured against performance goals and financial targets established by the Compensation Committee.

2.3Equity Compensation.

(a)Equity Grants. As soon as practical (but not more than two (2) business days) after the first Compensation Committee meeting immediately following Executive’s Start Date (or, if the Compensation Committee’s next such meeting occurs during a blackout period, then promptly after two (2) business days following the end of such blackout period), the Company will grant to Executive, pursuant to the terms of the Verra Mobility Corporation 2018 Equity Incentive Plan, as amended (the “Plan”), and applicable award agreements, the following equity grants:

(i)Time-Based Stock Option Grant. A grant of a non-statutory stock option award under the Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to two hundred eighty thousand dollars ($280,000) (“Time-Based Option”), subject to the Plan and Executive Time-Based Option award agreement, which shall include an annual time-based vesting of twenty-five percent (25%) increments on each of the first four anniversaries of the grant date, including continued service through each applicable vesting date. The Time-Based Option will have an exercise price per share equal to the Fair Market Value (as defined in the Plan) of a share of common stock of the Company on the date of grant.

(ii)Performance Share Unit Grant. A grant of a performance share unit award under the Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to two hundred ten thousand dollars ($210,000) (“PSUs”), subject to the Plan and Executive’s PSU award agreement, which shall include the following vesting schedule: the PSUs shall vest based on Relative Total Stockholder Return (“Relative TSR”), meaning the difference, measured in percentage points (rounded to the nearest 1/100 of 1%), for the three (3) year performance period between the Company Annualized TSR and the Comparator Group Median Annualized TSR, all as determined in accordance with

_______

Executive’s Initials

Executive’s PSU award agreement, as well as Executive’s continued service through the end of the performance period.

(iii)Time-Based Restricted Stock Unit Grant. A grant of a restricted stock unit award under the Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to two hundred ten thousand dollars ($210,000) (“RSUs”), subject to the Plan and Executive’s RSU award agreement, which shall include annual time-based vesting of twenty-five percent (25%) increments on each of the first four anniversaries of the grant date and the terms of the Plan and Executive’s RSU award agreement, including continued service through each applicable vesting date.

(iv)Make-Whole Restricted Stock Unit Grant. A grant of a restricted stock unit award under the Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to four hundred thousand dollars ($400,000) (“Make-Whole RSUs”), which shall include annual time-based vesting of twenty-five percent (25%) increments on each of the first four anniversaries of the grant date and the terms of the Plan and Executive’s RSU award agreement, including continued service through each applicable vesting date.

(b)Future Equity Compensation. During the Employment Period, Executive shall be eligible from time to time to participate in the Company’s equity incentive programs, subject to the discretion of the Board or its authorized designee(s). The terms and conditions of the vesting, forfeiture, and all other matters related to any equity compensation granted to Executive shall be subject to and governed by the Plan and the applicable award agreements and grant documents provided to Executive in connection with such equity compensation.

2.4Retirement and Welfare Plans. Executive shall be eligible to participate in employee retirement and welfare benefit plans of the Company (or a Company subsidiary or affiliate) made available to the Company’s (or its subsidiaries’ or affiliates’) senior level executives as a group or to its employees generally, as such retirement and welfare plans may be in effect from time to time and subject to the eligibility requirements of the plans. Nothing in this Agreement shall prevent the Company from adopting, amending or terminating any retirement, welfare or other employee benefit plans or programs from time to time as the Company deems appropriate.

2.5Vacation. Executive shall be entitled to paid vacation pursuant to the terms and conditions of the Company’s vacation and paid time off policies, as may be in effect from time to time.

_______

Executive’s Initials

2.6Reimbursement of Expenses. Executive shall be eligible to be reimbursed for all customary and appropriate business-related expenses actually incurred by Executive and documented in accordance with the Company’s policies applicable to senior level executives and as may be in effect from time to time.

3.Termination. Notwithstanding Section 1, Executive’s employment shall terminate, and the Employment Period shall terminate concurrently therewith, upon the occurrence of any of the following events:

3.1Termination By Company Without Cause or Resignation by Executive for Good Reason.

(a)The Company may terminate Executive’s employment at any time without Cause during the Employment Period from the position in which Executive is employed hereunder upon not less than thirty (30) days’ prior written notice to Executive. The Company shall have the discretion to terminate Executive’s employment during the notice period and pay continued Base Salary in lieu of notice. In addition, Executive may initiate a termination of employment under this Section 3.1 by resigning for Good Reason (in accordance with the notice and other provisions set forth in Section 3.7(b)).

(b)Upon termination under this Section 3.1, Executive shall receive (i) Executive’s accrued but unpaid Base Salary through the date of termination (payable on the Company’s first (1st) payroll processing date after Executive’s date of termination or earlier if required by applicable law), (ii) any unreimbursed business expenses incurred by Executive and payable in accordance with the Company’s standard expense reimbursement policies and Section 20 of this Agreement, and (iii) benefits earned, accrued and due under any qualified retirement plan or health and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan (collectively, the amounts in this Section 3.1(b) are “Guaranteed Payments”).

(c)If Executive’s employment terminates as described in Section 3.1(a) above and if, upon such termination, Executive (i) executes within twenty-one (21) days (or forty-five (45) days to the extent required by applicable law) after presentation to the Executive of, that he does not timely revoke, a written general release in a form provided by the Company releasing the Company from any and all claims (including with respect to all matters arising out of or related to Executive’s employment by the Company or the termination thereof) (the “Release”), and (ii) complies with the terms and conditions of the Release, including, without limitation, the terms and conditions of Sections 5, 6, 7, 8, and 9 of this Agreement (which shall be incorporated in the

_______

Executive’s Initials

Release by reference) below, Executive will be entitled to receive cash severance in an amount equal to twelve (12) months of Executive’s then-current Base Salary, plus a cash amount representing the total cost of the group healthcare premiums the Executive would have paid based on the coverages in effect at the time of Executive’s termination if the Executive elected continuation coverage under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for a period of twelve (12) months (the “Severance”). The Severance amount, less all required withholdings and authorized deductions, shall be paid in substantially equal installments consistent with the Company’s regularly scheduled payroll procedures until the Severance has been paid in full, subject to Section 3.1(d) below.

(d)Except as otherwise required by Section 3.8, the benefits described in Section 3.1(c) shall begin within sixty (60) days after Executive’s termination date, provided Executive has timely executed and not revoked the Release within such sixty (60) day period; and provided that notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of Executive’s execution of the Release, directly or indirectly, result in Executive’s designating the calendar year of payment, and if a payment that is “nonqualified deferred compensation” as defined under Section 409A of the Code (“Section 409A”) is subject to execution of the Release could be made in more than one taxable year of Executive, payment shall be made on the earliest date permitted under the terms of the Release in the later such taxable year.

(e)Executive agrees and acknowledges that the Severance provided to Executive pursuant to Section 3.1(c) is in lieu of, and is not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, policy, or program, other than the Guaranteed Payments.

(f)Executive agrees and acknowledges that if Executive fails to comply with Section 5, 6, 7, 8 or 9 below, or any obligation set forth in the Release, all payments under Section 3.1(c) shall immediately cease and Executive shall be required to immediately repay any cash Severance previously paid by the Company.

3.2Termination by Reason of Disability. Subject to applicable state and federal law, the Company may terminate Executive’s employment if Executive has been unable to perform the material duties of Executive’s position for a period of ninety (90) consecutive days or one hundred eighty (180) days in the aggregate during any twelve (12) month period because of physical or mental injury or illness (“Disability”). Executive agrees, in the event of a dispute under this Section 3.2 relating to Executive’s Disability, to submit to a physical examination by a licensed physician jointly selected by the Board and Executive. If the Company terminates Executive’s employment for Disability, Executive shall be entitled to receive the Guaranteed Payments as set forth in Section 3.1(b).

_______

Executive’s Initials

3.3Termination by Reason of Death. If Executive dies while employed by the Company, all obligations of the parties hereunder shall terminate immediately. The Company shall pay to Executive’s executor, legal representative, administrator or designated beneficiary, as applicable, the Guaranteed Payments as set forth in Section 3.1(b).

3.4Termination by Company for Cause or Resignation by Executive without Good Reason. The Company may terminate Executive’s employment at any time for Cause upon written notice to Executive and Executive may initiate a termination of employment by resigning without Good Reason upon not less than thirty (30) days’ prior written notice to the Company, and in any such event all payments under this Agreement shall cease except that the Company shall pay to Executive the Guaranteed Payments. In such event, Executive will not receive the Severance or any other severance compensation or benefits.

3.5Notice of Termination. Any termination of Executive’s employment by either party shall be communicated by a written notice of termination to the other party hereto given in accordance with Section 13. The notice of termination shall (a) indicate the specific termination provision in this Agreement relied upon; (b) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof, provided, that no basis need be provided by the Company in connection with a termination without Cause by the Company or a termination without Good Reason by Executive; and (c) specify the termination date in accordance with the requirements of this Agreement.

3.6Cooperation with the Company After Termination. During any notice period preceding termination of Executive’s employment for any reason, Executive agrees to cooperate with the Company in all matters relating to the winding up of Executive’s pending work and the orderly transfer and transition of any such pending work to such other employees as may be designated by the Company. Following termination of employment, Executive agrees to cooperate with the Company, at reasonable times and locales and upon reasonable prior notice, in (a) responding to requests by the Company for information concerning work performed by Executive during the period of Executive’s employment with the Company and with regard to any matters that relate to or arise out of the business of the Company during the period of his employment and about which Executive may have knowledge; and (b) any investigation or review that may be performed by the Company or any government authority or in connection with any litigation or proceeding in which the Company may become involved. Executive’s obligations under this Section 3.6 include (without limitation) (i) making himself available to testify on behalf of the Company or any of its affiliates in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative; (ii) assisting the Company or any of its affiliates in any such action, suit, or proceeding, by providing truthful and accurate information; (iii) and meeting and consulting with the Board or its representatives or counsel, or representatives or counsel to any of the Company’s affiliates as may be reasonably requested and after taking into account the Executive’s post-termination responsibilities and obligations. The Company will reimburse Executive for any reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.

_______

Executive’s Initials

3.7Definitions.

(a)“Cause” shall mean: (i) Executive being charged with a felony or misdemeanor criminal offense, other than a misdemeanor traffic offense; (ii) Executive’s engagement in any act involving gross misconduct or dishonesty that is materially injurious to the Company or any of its affiliates; (iii) Executive’s willful and continued breach of, or failure to substantially perform under or comply with any of the material terms and covenants of any written agreement with the Company or any of its affiliates; (iv) Executive’s willful and continued breach of, or refusal or failure substantially to perform under, any policy or reasonable performance goals set by the Company or any of its affiliates with respect to Executive’s job duties or responsibilities, the operation of the Company's or any of its affiliates’ business and affairs, or the management of the Company’s or any of its affiliates’ employees; or (v) Executive commits or has committed a breach of any laws or regulations which may affect or relate to the conduct of the Company’s or any of its affiliates’ business; provided, however, that with respect to (iii) and (iv) above, Executive will be provided notice of any misconduct and/or breach constituting Cause and be given a reasonable opportunity (not to exceed thirty (30) consecutive days) to cure the misconduct and/or breach (unless such misconduct and/or breach is determined by the Company not to be susceptible to cure, in which case the termination shall be deemed to be immediate), and provided further that such cure period shall only be available for the first such act of misconduct and/or breach of the same or substantially similar type, and subsequent acts of misconduct and/or breach of the same or substantially similar type shall constitute Cause without regard to Executive’s subsequent cure of same.

(b) “Good Reason” shall mean the occurrence of any of the following events or conditions, unless Executive has expressly consented in writing thereto:

(i)A material reduction in Executive’s Base Salary;

(ii)The material diminution of Executive’s duties, responsibilities, or authority, provided that Good Reason shall not exist under this clause (ii) if such diminution of authority, duties and responsibilities is a result of the hiring of additional subordinates to assume some of Executive’s duties and responsibilities which are in fact, in the aggregate from time to time, not a material diminution of such authority, duties and responsibilities as Executive Vice President, Government Solutions;

(iii)The Company requires that Executive’s principal office location be moved to a location more than fifty (50) miles from Executive’s principal office location immediately before the change without Executive’s prior consent; or

_______

Executive’s Initials

(iv)A material breach by the Company of this Agreement or any other written agreement between the parties.

For purposes of this Agreement, Executive shall not have Good Reason for termination unless (i) Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) Executive notifies the Company in writing of the occurrence of the Good Reason condition within sixty (60) days of such occurrence; (iii) Executive cooperates in good faith with the Company’s efforts, for a period not less than thirty (30) days following such notice (the “Cure Period”), to cure the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist following expiration of the Cure Period as determined by the Company; and (v) Executive terminates his employment within sixty (60) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

3.8Required Postponement for Specified Executives. If Executive is considered a “specified employee” (as defined under Section 409A) and payment of any amounts under this Agreement is required to be delayed for a period of six (6) months after separation from service pursuant to Section 409A, payment of such amounts shall be delayed as required by Section 409A, and the accumulated postponed amounts shall be paid in a lump-sum payment within five (5) days after the end of the six (6) month period. If Executive dies during the postponement period prior to the payment of benefits, the amounts postponed on account of Section 409A shall be paid to the personal representative of Executive’s estate within thirty (30) days after the date of Executive’s death.

4.Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company and for which Executive may qualify; provided, however, that if Executive becomes entitled to and receives the Severance provided for in Section 3 of this Agreement, Executive hereby waives Executive’s right to receive payments under any severance plan or similar program that would otherwise apply to Executive. In the event of any inconsistency between this Agreement and any other plan, program or agreement in which Executive is a participant or a party, this Agreement shall control unless such other plan, program or agreement specifically refers to this Agreement as not so controlling.

5.Confidentiality. Executive agrees that Executive’s services to the Company are of a special, unique and extraordinary character, and that Executive’s position places Executive in a position of confidence and trust with the Company’s customers, clients, vendors, suppliers, contractors, business partners and employees. Executive also recognizes that Executive’s position with the Company will give Executive substantial access to Confidential Information (as defined below), the unauthorized use or disclosure of which to competitors of the Company would cause the Company to suffer substantial and irreparable damage. Executive recognizes and agrees, therefore, that it is in the Company’s legitimate business interest to restrict Executive’s use of Confidential Information for any purposes other than the proper discharge of Executive’s employment duties for the Company, and to limit any potential appropriation of Confidential

_______

Executive’s Initials

Information by Executive for the benefit of the Company’s competitors and/or to the detriment of the Company. Accordingly, Executive agrees as follows:

(a)Executive shall not at any time, whether during or after the termination of Executive’s employment with the Company for any reason, reveal or disclose to any person or entity any of the trade secrets or confidential information of the Company, or the trade secrets or confidential information of any third party which the Company is under an obligation to keep confidential, including but not limited to trade secrets or confidential information respecting products, projects, designs, developmental or experimental work, computer programs, software, data bases, know-how, processes, formulas, customers, business partners, suppliers, business plans, marketing plans and strategies, finances, employee compensation, or personnel, information obtained from third parties under confidentiality agreements, and other business information (“Confidential Information”), except as may be required in the ordinary course of performing Executive’s duties as an employee of the Company, and Executive shall keep secret all Confidential Information entrusted to Executive and shall not use or attempt to use any such Confidential Information for personal gain or in any manner that may injure or cause loss, or could reasonably be expected to injure or cause loss, whether directly or indirectly, to the Company.

(b)The above restrictions shall not apply to: (i) information that at the time of disclosure is in the public domain through no fault of Executive; (ii) information received from a third party outside of the Company that was disclosed without a breach of any confidentiality obligation on the part of such third party; (iii) information released or disclosed by an authorized representative of the Company; or (iv) information that may be required by law or an order of any court, agency or proceeding to be disclosed; provided that Executive shall provide the Company prior written notice of any such required disclosure once Executive has knowledge of it and will help the Company to the extent reasonable to obtain an appropriate protective order. Moreover, the foregoing shall not limit Executive’s ability to (A) discuss the terms of Executive’s employment, wages and working conditions to the extent expressly protected by applicable law, (B) report possible violations of federal securities laws to the appropriate government enforcing agency and make such other disclosures that are expressly protected under federal or state “whistleblower” laws, or (C) respond to inquiries from, or otherwise cooperate with, any governmental or regulatory investigation or proceeding.

(c)Executive agrees that during Executive’s employment with the Company Executive shall not take, use or permit to be used any records, data, notes, reports, proposals, lists, correspondence, computer code, specifications, drawings, blueprints, sketches, flow diagrams, materials, equipment, devices or any other documents or property (including photocopies or other reproductions of any of the aforesaid items) or other materials of any nature constituting Confidential Information or Developments (as defined below) otherwise than for the benefit of the Company. Executive further agrees that Executive shall not, after the termination of Executive’s employment for any reason, use or permit to be used any such records, data, notes, reports, proposals, lists, correspondence, computer code, specifications, drawings, blueprints, sketches, flow diagrams, materials, equipment, devices or any other documents or property (including

_______

Executive’s Initials

photocopies or other reproductions of any of the aforesaid items), it being agreed that all of the foregoing shall be and remain the sole and exclusive property of the Company and that, immediately upon the termination of Executive’s employment for any reason, Executive shall deliver all of the foregoing, and all copies thereof, to the Company, at its headquarters.

(d)Executive agrees that upon the termination of Executive’s employment with the Company for any reason, Executive shall not take or retain without written authorization any documents, files or other property of the Company, and Executive will return promptly to the Company any such documents, files or property in Executive’s possession or custody, including any copies thereof maintained in any medium or format. Executive recognizes that all documents, files and property that Executive has received and will receive from the Company (with the exception of documents relating to benefits to which Executive might be entitled following the termination of Executive’s employment with the Company), are for the exclusive use of the Company and employees who are discharging their responsibilities on behalf of the Company, and that Executive has no claim or right to the continued use, possession or custody of such documents, files or property following the termination of Executive’s employment with the Company for any reason.

(e)Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive will not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

6.Intellectual Property.

(a)If at any time or times during Executive’s employment with the Company Executive shall (either alone or with others) make, conceive, discover or reduce to practice any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula, data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) (herein called “Developments”) that (i) relates to the business of the Company or any of the products or services being developed, manufactured or sold by the Company or which may be used in relation therewith, (ii) results from tasks assigned to Executive by the Company or (iii) results from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company, such Developments and the benefits thereof shall immediately become the sole and absolute property of the Company and its assigns, and Executive shall promptly disclose to the Company (or any persons designated by it) each such Development, and Executive hereby assigns any rights Executive may have or acquire in the Developments and benefits and/or rights

_______

Executive’s Initials

resulting therefrom to the Company and its assigns without further compensation and shall communicate, without cost or delay, and without publishing the same, all available information relating thereto (with all necessary plans and models) to the Company.

(b)Upon disclosure of each Development to the Company, Executive will, during Executive’s employment and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require:

(i)to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and

(ii)to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.

(c)In the event the Company is unable, after reasonable effort, to secure Executive’s signature on any letters patent, copyright or other analogous protection relating to a Development, whether because of Executive’s physical or mental incapacity or for any other reason whatsoever, Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact for the sole purpose of acting for and on Executive’s behalf and in his stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, copyright and other analogous protection thereon with the same legal force and effect as if executed by Executive.

7.Non-Competition. During Executive’s employment with the Company and for a period of twelve (12) months after termination of Executive’s employment (for any reason whatsoever, whether voluntary or involuntary) (the “Non-Competition Period”), Executive shall not, without the prior written approval of the Board, whether alone or as a partner, officer, director, consultant, agent, employee, representative or stockholder of any company, entity, or other commercial enterprise, or in any other capacity, directly or indirectly engage in the business of developing, manufacturing, marketing, selling and otherwise providing products, hardware, software, materials and support services relating to traffic control solutions, which include without limitation, photo, speed and red light automated enforcement technologies, parking systems, parking enforcement, electronic toll collection, toll and traffic violation enforcement management, automated revenue collection processing systems and software, related transaction processing operations for any of the foregoing, and any other products or services offered, conducted, authorized or provided by the Company during the last twelve (12) months of Executive’s employment (the “Business”), in

_______

Executive’s Initials

any geographic regions for which Executive was responsible, or performed duties, on behalf of the Company during the last twelve (12) months of Executive’s employment, or in any geographic region in which the Company engaged in such business, or had developed plans to engage in such business, during the last twelve (12) months of Executive’s employment .

The foregoing Non-Competition prohibition shall not prevent Executive’s employment or engagement after termination of Executive’s employment by any company or business organization, so long as the activities of any such employment or engagement, in any capacity, do not involve work on matters related to the Business. Executive shall be permitted to own securities of a public company not in excess of five percent (5%) of any class of such securities and to own stock, partnership interests or other securities of any entity not in excess of five percent (5%) of any class of such securities and such ownership shall not be considered to be in competition with the Company.

8.Non-Solicitation. During Executive’s employment with the Company and for a period of eighteen (18) months after termination of such employment (for any reason, whether voluntary or involuntary), Executive agrees that Executive will not:

(a)directly or indirectly (i) solicit, entice or induce, or attempt to solicit, entice or induce, any customer or client to become a customer or client of any other person, firm or corporation with respect to any products or services then sold, offered, or under development by the Company, or (ii) solicit, entice or induce, or attempt to solicit, entice or induce any customer, client, vendor, supplier, contractor, or business development partner to cease doing business with or any in way reduce or impair its business relationship with the Company, and Executive shall not approach or contact any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or

(b)directly or indirectly (i) solicit or recruit, or attempt to solicit or recruit, any employee, consultant or contractor of the Company to terminate employment or otherwise cease providing services to the Company or (ii) solicit or recruit, or attempt to solicit or recruit, any employee to work for or provide services to a third party other than the Company; and Executive shall not approach any such person for such purpose or authorize or knowingly approve the taking of such actions by any other person.

9.Non-Disparagement. During Executive’s employment and at all times following Executive’s termination of employment for any reason, Executive agrees not to make, or knowingly cause to be made, any public disparaging statement or public communication, written or oral, concerning the Company, or otherwise impugn the business or management of, damage the reputation of, or interfere with the normal operations of the Company or any of its respective past or present employees, executives, officers, directors, shareholders, members, managers,

_______

Executive’s Initials

principals, or representatives. The foregoing prohibitions include, without limitation, (i) non-verbal comments or statements made on the Internet, including without limitation, on blogs, forums, social media platforms, review or rating sites, or any Internet site or online message board (including but not limited to LinkedIn and GlassDoor); and (ii) comments or statements to any person or entity, including without limitation, to the press or media, the Company, or any entity, customer, client, vendor, supplier, consultant or contractor with whom the Company has, has had or may in the future have a business relationship, that would in any way adversely affect the conduct of the business of the Company (including but not limited to any business plans or prospects) or the reputation of the Company or the aforementioned persons (including without limitation former and present employees of the Company). Nothing in this provision or elsewhere in this Agreement shall (a) affect the parties’ obligation to provide truthful information as may be required by law, rule, regulation or legal process, or as requested by any legal or regulatory authority, (b) unlawfully impair or interfere with Executive’s rights under Section 7 of the National Labor Relations Act, or (c) impair or in any way interfere with the Company’s ability to engage in intra-Company communications between or among officers, members of the Board, and/or their advisors related to Executive’s compensation, retention, and/or job performance.

10.General Provisions.

(a)Executive acknowledges and agrees that, for purposes of Sections 5, 6, 7, 8, and 9 of this Agreement, the term “Company” shall include Verra Mobility Corporation, VM Consolidated, Inc., and their direct and indirect subsidiaries and affiliates.

(b)Executive acknowledges and agrees that the type and periods of restrictions imposed in Sections 7 and 8 of this Agreement are fair, reasonable and no greater than necessary to protect the Company’s legitimate business interests, and that such restrictions are intended solely to protect the legitimate interests of the Company, including its Confidential Information, goodwill (client, customer, employee, and otherwise), and business interests, and shall not in any way prevent Executive from earning a livelihood or impose upon Executive undue hardship. Executive recognizes and agrees that the Company competes and provides its products and services in numerous jurisdictions throughout the word, and that Executive’s access to Confidential Information makes it both reasonable and necessary for the Company to restrict Executive’s post-employment activities in any geographic market in which the Company competes or is developing plans to compete, and in which Executive’s access to Confidential Information and other proprietary information could be used to the detriment of the Company and for which the Company would have no adequate remedy at law. In the event that any restriction set forth in this Agreement is determined by a court of competent jurisdiction to be overbroad or unenforceable with respect to scope, time (duration), or geographical coverage, Executive agrees that such restriction or restrictions shall be modified and narrowed, either by such court of competent jurisdiction, or by the Company, to the least extent possible under applicable law for such restriction or restrictions to be enforceable so as to preserve and protect the legitimate interests of the Company as described in this Agreement, and without negating or impairing any other restrictions or agreements set forth herein.

_______

Executive’s Initials

(c)Executive acknowledges and agrees that should Executive breach any of the covenants, restrictions and agreements contained herein, irreparable loss and injury would result to the Company, monetary relief would not compensate for such breach, and damages arising out of such a breach would be difficult to fully ascertain. Executive therefore agrees that, in addition to any and all other remedies available at law or at equity, the Company shall be entitled to have the covenants, restrictions and agreements contained in Sections 5, 6, 7, 8, and 9 specifically enforced (including, without limitation, by temporary, preliminary, and permanent injunctions and restraining orders), without the need to post any bond or security, by any state or federal court in the State of Arizona having equity jurisdiction, and Executive agrees to be subject to the jurisdiction of such court and hereby waives any objection to the jurisdiction or venue thereof.

(d)Executive agrees that if the Company fails to take action to remedy any breach by Executive of this Agreement or any portion of the Agreement, such inaction by the Company shall not operate or be construed as a waiver of such breach or of any subsequent or other breach by Executive of the same or any other provision, agreement or covenant.

(e)Executive acknowledges and agrees that the payments and benefits to be provided to Executive under this Agreement are provided as, and constitute sufficient and adequate, consideration for the covenants in Sections 5, 6, 7, 8, and 9 hereof.

(f)Executive’s obligations under Sections 5, 6, 7, 8 and 9 shall survive the termination of Executive’s employment in accordance with their terms and shall remain in effect despite any change in position, title, duties, compensation, or other terms and conditions of Executive’s employment. The existence of a claim by Executive against Company, whether predicated on this Agreement or otherwise, shall not relieve Executive of Executive’s obligations under Sections 5, 6, 7, 8 or 9 or make them unenforceable.

11.Representations and Warranties. Executive represents and warrants the following to the Company, each of which Executive acknowledges is a material inducement to the Company’s willingness to enter into this Agreement and a material provision of this Agreement:

(a)Other than as previously disclosed in writing or provided to the Company, Executive is not a party to or bound by any employment agreements, restrictive covenants, non-compete restrictions, non-solicitation restrictions, and/or confidentiality or non-disclosure agreements with any other person, business or entity, or any agreement or contract requiring Executive to assign inventions to another party (each, a “Restrictive Agreement”), and Executive has conducted a thorough review of any and all agreements he may have entered into with any current or former employer or any other relevant party to ensure that this representation and warranty is correct.

_______

Executive’s Initials

(b)No Restrictive Agreement prohibits, restricts, limits or otherwise affects Executive’s employment with the Company as an executive or ability to perform any of Executive’s duties or responsibilities for the Company as contemplated herein.

(c)Executive has not made any material misrepresentation or omission in the course of his communications with the Company regarding the Restrictive Agreements or other obligations to any current or former employer or other third party.

(d)Executive has not, directly or indirectly, removed, downloaded, or copied any confidential or proprietary information or records of any current or former employer (or their subsidiaries and/or affiliates) without the express written consent of an authorized representative of such entity, and shall not use or possess, as of the date Executive begins employment and at all times during his employment with the Company, any confidential or proprietary information or records of any current or former employer (or their subsidiaries and/or affiliates), whether in hard copy or electronic form, including, but not limited to, documents, files, disks, or other materials, all of which Executive is prohibited from using in connection with his employment with the Company.

12.Survivorship. The respective rights and obligations of the parties under this Agreement, including but not limited to those rights and obligations set forth in Sections 5, 6, 7, 8, and 9, shall survive termination of Executive’s employment and any termination of this Agreement for any reason to the extent necessary to the intended preservation of such rights and obligations.

13.Notices. All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand-delivered or mailed by registered or certified mail, as follows (provided that notice of change of address shall be deemed given only when received):

If to the Company, to:

VM Consolidated, Inc.

1150 North Alma School Road

Mesa, AZ 85201

Attn: General Counsel

If to Executive, to:

The address of his principal residence most recently on file with the Company.

_______

Executive’s Initials

or to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section.

14.Contents of Agreement, Amendment, Interpretation and Assignment.

(a)This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings concerning Executive’s employment by the Company and cannot be changed or modified except upon written amendment approved by the Board and executed on its behalf by a duly authorized officer and by Executive.

(b)The headings in this Agreement are for convenience only, and both parties agree that they shall not be construed or interpreted to modify or affect the construction or interpretation of any provision of this Agreement.

(c)All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by Executive.

15.Severability. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated by a court of competent jurisdiction to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement that can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.

16.Remedies Cumulative; No Waiver. No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall operate or be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion.

_______

Executive’s Initials

17.Withholding. All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement other than such taxes that are, by their nature, obligations of the Company (for example, and without limitation, the employer portion of the Federal Insurance Contributions Act (FICA) taxes).

18.Counterparts. This Agreement may be executed in counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. Facsimile signatures and signatures transmitted by PDF shall be equivalent to original signatures.

19.Governing Law; Jurisdiction. This Agreement shall be governed by and interpreted under the laws of the State of Arizona without giving effect to (i) any conflicts-of-law provisions or choice of law provisions of the State of Arizona or of any other jurisdiction which provisions (if applied) would result in the application of the laws of any other jurisdiction other than of the State of Arizona, or (ii) canons of construction or principles of law that construe agreements against the draftsperson. Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court located in Arizona or any state court located within such state, in respect of any claim, dispute, or controversy in any way arising out of or relating to this Agreement or Executive’s employment with the Company or the termination thereof, and each party hereby waives, and agrees not to assert as a defense in any action, suit or proceeding in which any such claim is made, that such party is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts. Any appellate proceedings shall take place in the appropriate courts having appellate jurisdiction over the courts set forth in this Section.

20.Section 409A. This Agreement is intended to comply with or otherwise be exempt from Section 409A and its corresponding regulations, to the extent applicable, and shall be so construed. Notwithstanding anything in this Agreement to the contrary, payments of “nonqualified deferred compensation” subject to Section 409A may only be made under this Agreement upon an event and in a manner permitted by Section 409A, to the extent applicable. For purposes of Section 409A, all payments of “nonqualified deferred compensation” subject to Section 409A to be made upon the termination of Executive’s employment under this Agreement may only be made upon a “separation from service” under Section 409A. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall Executive, directly or indirectly, designate the calendar year of payment with respect to any amount that is

_______

Executive’s Initials

“nonqualified deferred compensation” subject to Section 409A. All reimbursements provided under this Agreement that are “nonqualified deferred compensation” that is subject to Section 409A shall be made or provided in accordance with Section 409A, including, where applicable, the requirements that (a) any reimbursement is for expenses incurred during the Employment Period (or during such other time period specified in this Agreement), (b) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (c) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (d) the right to reimbursement is not subject to liquidation or exchange for another benefit. Nothing herein shall be construed as having modified the time and form of payment of any amounts or payments of “nonqualified deferred compensation” within the meaning Section 409A that were otherwise payable pursuant to the terms of any agreement between Company and Executive in effect prior to the date of this Agreement.

21.Section 280G of the Code. Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or any of its affiliates to Executive or for Executive’s benefit pursuant to the terms of this Agreement or otherwise (the “Covered Payments”) constitute parachute payments (the “Parachute Payments”) within the meaning of Section 280G of the Code and, but for this Section 21, would be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under (i) above is less than the amount under (ii) above will the Covered Payments be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the “Reduced Amount”). “Net Benefit” shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes.

(a)Any such reduction shall be made in accordance with Section 409A and the following:

(i)the Covered Payments consisting of cash severance benefits that do not constitute nonqualified deferred compensation subject to Section 409A shall be reduced first, in reverse chronological order; and

(ii)all other Covered Payments consisting of cash payments, and Covered Payments consisting of accelerated vesting of equity based awards to which Treas. Reg. §1.280G-1 Q/A-24(c) does not apply, and that in either case do not constitute nonqualified deferred compensation subject to Section 409A, shall be reduced second, in reverse chronological order;

_______

Executive’s Initials

(iii)all Covered Payments consisting of cash payments that constitute nonqualified deferred compensation subject to Section 409A shall be reduced third, in reverse chronological order; and

(iv)all Covered Payments consisting of accelerated vesting of equity-based awards to which Treas. Reg. § 1.280G-1 Q/A-24(c) applies shall be the last Covered Payments to be reduced.

(b)Any determination required under this Section 21 shall be made in writing in good faith by an independent accounting firm selected by the Company and reasonably acceptable to the Executive (the “Accountants”). The Company and Executive shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 21. For purposes of making the calculations and determinations required by this Section 21, the Accountants may rely on reasonable, good-faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Accountants’ determinations shall be final and binding on the Company and Executive. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 21.

(c)It is possible that after the determinations and selections made pursuant to this Section 21 Executive will receive Covered Payments that are in the aggregate more than the amount intended or required to be provided after application of this Section 21 (“Overpayment”) or less than the amount intended or required to be provided after application of this Section 21 (“Underpayment”).

(i)In the event that: (A) the Accountants determine, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or Executive that the Accountants believe has a high probability of success, that an Overpayment has been made or (B) it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved that an Overpayment has been made, then Executive shall pay any such Overpayment to the Company together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date of Executive’s receipt of the Overpayment until the date of repayment.

(ii)In the event that: (A) the Accountants, based upon controlling precedent or substantial authority, determine that an Underpayment has occurred or (B) a court of competent jurisdiction determines that an Underpayment has occurred, any such Underpayment will be paid promptly by the Company to or for the benefit of Executive together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date the amount should have otherwise been paid to Executive until the payment date.

[Signature Page Follows.]

_______

Executive’s Initials

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.

VM CONSOLIDATED, INC.
By:	/s/ David Roberts
Name:	David Roberts
Title:	Chief Executive Officer
Date:	January 12, 2022
/s/ Jonathan Baldwin
JONATHAN BALDWIN
Date: January 16, 2022

IF " DOCVARIABLE "SWDocIDLocation" " = "1" " DOCPROPERTY "SWDocID" WEST\292371779.2" ""

EX-10

Exhibit 10.31

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by and between VM Consolidated, Inc., a Delaware corporation having its principal offices in Mesa, Arizona and a wholly owned subsidiary of Verra Mobility Corporation (“VM Consolidated” and, together with Verra Mobility Corporation, the “Company”) and Adam Blake (the “Executive”). This Agreement must be executed by Executive on or before October 20, 2021, and if so executed, shall become effective on, and is contingent upon the occurrence of, the Closing Date pursuant to, and as defined in, that certain Agreement and Plan of Merger (the “Merger Agreement”), by and between VM Consolidated, T2 Systems Parent Corporation, Merger Sub and the Representative (each as defined in the Merger Agreement). If the Closing Date has not occurred on or before January 14, 2022 (the “Expiration Date”), then this Agreement shall become null and void, unless the Expiration Date is extended by mutual agreement of the parties.

WHEREAS, Executive currently serves as the President and Chief Executive Officer of T2 Systems, Inc., an Indiana corporation (“T2 Systems”) and wholly owned subsidiary of T2 Systems Parent Corporation, pursuant to that certain Employment Agreement (the “Prior Agreement”) dated [•], 2017 (sic); and

WHEREAS, the Company and Executive now wish to amend and restate the Prior Agreement in its entirety to provide for amended terms and conditions of Executive’s continued employment, pursuant to the terms and conditions set forth in this Agreement; and

WHEREAS, following the closing of the transaction described in the Merger Arrangement, the Company desires to employ Executive as President, T2 Systems, and Executive desires to serve in such capacity on behalf of the Company, upon the amended terms and conditions hereinafter set forth; and

WHEREAS, Executive acknowledges that he has had an opportunity to consider this Agreement and to consult with an independent advisor of his choosing with regard to the terms of this Agreement and enters into this Agreement voluntarily and with a full understanding of its terms.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1.Employment.

1.1Employment Period. Executive’s employment hereunder will commence on the Closing Date (the “Start Date”), subject to and contingent upon the Closing of the transaction described in the Merger Agreement. Executive shall be employed by the Company (or a Company subsidiary or affiliate) on an “at will” basis, meaning either the Company or Executive may terminate Executive’s employment at any time, with or without cause or advance notice (such period of employment under this Agreement, the “Employment Period”). Any contrary representations that may have been made to Executive shall be superseded by this Agreement. This

_______

Executive’s Initials

Agreement shall constitute the full and complete agreement between Executive and the Company on the “at will” nature of Executive’s employment with the Company, which may be changed only in an express written agreement signed by Executive and a duly authorized officer of the Company. Executive’s rights to any compensation following a termination shall be only as set forth in Section 3 herein.

1.2Public Announcement. The Company may, with advanced notice to Executive, publicly announce the existence of this Executive Employment Agreement at any time after it has been fully executed. Prior to any public announcement made by the Company, Executive shall not make any public release, statement or communication concerning Executive’s acceptance of employment with the Company without the prior written approval of the Company’s Board of Directors (the “Board”) or its designee.

1.3Duties and Responsibilities. Commencing on the Start Date, Executive shall serve as President, T2 Systems, which is a Company Executive Vice President position, reporting to the Company’s Chief Executive Officer, and shall perform all duties and accept all responsibilities incident to such position and such other duties as may be reasonably assigned to Executive by the Company’s Chief Executive Officer consistent with such position.

1.4Extent of Services. Executive shall use his best efforts to carry out Executive’s duties and responsibilities under Section 1.3 hereof and, consistent with the other provisions of this Agreement, shall devote substantially all of Executive’s business time, attention and energy thereto. In the performance of his duties, Executive shall observe and adhere to all applicable Company policies and procedures as may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion. During the Employment Period, Executive may engage in volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable organization as Executive may wish to serve, in all such cases not interfering with Executive’s responsibilities and performance of Executive’s duties hereunder. The foregoing shall not be construed as preventing Executive from owning less than one percent (1%) of the total outstanding shares of a publicly traded company.

1.5Principal Location of Services. Executive shall perform his duties hereunder principally out of T2 Systems’ corporate headquarters (presently located in Indianapolis, Indiana) and shall undertake such travel within or outside of the United States as is necessary or advisable for the efficient operations of the Company and the performance of Executive’s duties hereunder, including such travel as is required to the Company’s corporate headquarters (presently located in Mesa, Arizona). Executive shall be reimbursed for his travel expenses in accordance with T2 Systems’ Travel & Expense Policy.

2.Compensation and Benefits.

_______

Executive’s Initials

2.1Base Salary. For all the services rendered by Executive hereunder, the Company or T2 Systems shall pay or cause to be paid to Executive a base salary (“Base Salary”) at the annualized rate of three hundred forty thousand dollars ($340,000.00), subject to all required withholdings and authorized deductions and payable in installments at such times as the applicable payrolling entity pays its other employees. Executive’s Base Salary is subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”) consistent with other members of the Company’s executive team.

2.2Short-Term Discretionary Cash Bonus.For each fiscal year during the Employment Period, Executive shall be eligible to receive an annual discretionary cash bonus (the “STIP Bonus”) for the services rendered by Executive under this Agreement, subject to the terms and conditions as set forth in the Verra Mobility Amended and Restated Short-Term Incentive Plan (or any successor plan) (the “STIP Plan”). Executive’s STIP Bonus target shall be seventy five percent (75%) of the Executive’s Base Salary paid during the applicable plan year. The payment and amount of the STIP Bonus, if any, will be determined by the Compensation Committee based on Executive’s performance, T2 Systems’ financial performance and the Company’s financial performance, in each case measured against performance goals and financial targets established by the Compensation Committee.

2.3Equity Compensation.

(a)Equity Grants. As soon as practical (but not more than two (2) business days) after the first Compensation Committee meeting immediately following Executive’s Start Date (or, if the Compensation Committee’s next such meeting occurs during a blackout period, then promptly after two (2) business days following the end of such blackout period), the Company will grant to Executive, pursuant to the terms of the Verra Mobility Corporation 2018 Equity Incentive Plan, as amended (the “Plan”), and applicable award agreements, the following equity grants:

(i)Time-Based Stock Option Grant. A grant of a non-statutory stock option award under the Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to two-hundred seventy two thousand dollars ($272,000.00) (“Time-Based Option”), subject to the Plan and Executive Time-Based Option award agreement, which shall include an annual time-based vesting of twenty-five percent (25%) increments on each of the first four anniversaries of the grant date, including continued service through each applicable vesting date. The Time-Based Option will have an exercise price per share equal to the Fair Market Value (as defined in the Plan) of a share of common stock of the Company on the date of grant.

(ii)Performance Share Unit Grant. A grant of a performance share unit award under the Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the

_______

Executive’s Initials

Nasdaq Capital Market on the date of grant, equal to two-hundred four thousand dollars ($204,000.00) (“PSUs”), subject to the Plan and Executive’s PSU award agreement, which shall include the following vesting schedule: the PSUs shall vest based on Relative Total Stockholder Return (“Relative TSR”), meaning the difference, measured in percentage points (rounded to the nearest 1/100 of 1%), for the three (3) year performance period between the Company Annualized TSR and the Comparator Group Median Annualized TSR, all as determined in accordance with Executive’s PSU award agreement, as well as Executive’s continued service through the end of the performance period.

(iii)Time-Based Restricted Stock Unit Grant. A grant of a restricted stock unit award under the Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to two-hundred four thousand dollars ($204,000.00) (“RSUs”), subject to the Plan and Executive’s RSU award agreement, which shall include annual time-based vesting of twenty-five percent (25%) increments on each of the first four anniversaries of the grant date and the terms of the Plan and Executive’s RSU award agreement, including continued service through each applicable vesting date.

(iv)Onboarding Restricted Stock Unit Grant. A grant of a restricted stock unit award under the Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to two-hundred thousand dollars ($200,000.00), which shall include annual time-based vesting of twenty-five percent (25%) increments on each of the first four anniversaries of the grant date and the terms of the Plan and Executive’s RSU award agreement, including continued service through each applicable vesting date.

(b)Future Equity Compensation. During the Employment Period, Executive shall be eligible from time to time to participate in the Company’s equity incentive programs, subject to the discretion of the Board or its authorized designee(s). The terms and conditions of the vesting, forfeiture, and all other matters related to any equity compensation granted to Executive shall be subject to and governed by the Plan and the applicable award agreements and grant documents provided to Executive in connection with such equity compensation.

2.4Retirement and Welfare Plans. Executive shall be eligible to participate in employee retirement and welfare benefit plans of T2 Systems made available to T2 Systems employees generally, as such retirement and welfare plans may be in effect from time to time and subject to the eligibility requirements of the plans. Nothing in this Agreement shall prevent the Company from adopting, amending or terminating any T2 Systems’ retirement, welfare or other employee benefit plans or programs from time to time as the Company deems appropriate.

_______

Executive’s Initials

2.5Vacation. Executive shall be entitled to paid vacation pursuant to the terms and conditions of T2 Systems’ vacation and paid time off policies, as may be in effect from time to time.

2.6Reimbursement of Expenses. Executive shall be eligible to be reimbursed for all customary and appropriate business-related expenses actually incurred by Executive and documented in accordance with T2 Systems’ policies as may be in effect from time to time.

3.Termination. Notwithstanding Section 1.1, Executive’s employment shall terminate, and the Employment Period shall terminate concurrently therewith, upon the occurrence of any of the following events:

3.1Termination By Company Without Cause or Resignation by Executive for Good Reason.

(a)The Company may terminate Executive’s employment at any time without Cause during the Employment Period from the position in which Executive is employed hereunder upon not less than thirty (30) days’ prior written notice to Executive. The Company shall have the discretion to terminate Executive’s employment during the notice period and pay continued Base Salary in lieu of notice. In addition, Executive may initiate a termination of employment under this Section 3.1(a) by resigning for Good Reason (in accordance with the notice and other provisions set forth in Section 3.7(b)).

(b)Upon termination under Section 3.1(a), Executive shall receive (i) Executive’s accrued but unpaid Base Salary through the date of termination (payable on the first (1st) payroll processing date after Executive’s date of termination or earlier if required by applicable law), (ii) any unreimbursed business expenses incurred by Executive and payable in accordance with the applicable expense reimbursement policies and Section 20 of this Agreement, and (iii) benefits earned, accrued and due under any qualified retirement plan or health and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan (collectively, the amounts in this Section 3.1(b) are “Guaranteed Payments”).

(c)If Executive’s employment terminates as described in Section 3.1(a) above and if, upon such termination, Executive (i) executes within twenty-one (21) days (or forty-five (45) days to the extent required by applicable law) after presentation to the Executive of a written general release in a form provided by the Company releasing the Company from any and all claims (including with respect to all matters arising out of or related to Executive’s employment by the Company or the termination thereof), that he does not timely revoke (the “Release”), and (ii)

_______

Executive’s Initials

complies with the terms and conditions of the Release, including, without limitation, the terms and conditions of Sections 5, 6, 7, 8 and 9 of this Agreement (which shall be incorporated in the Release by reference, Executive will be entitled to receive cash severance in an amount equal to twelve (12) months of Executive’s then-current Base Salary, plus a cash amount representing the total cost of the group healthcare premiums the Executive would have paid based on the coverages in effect at the time of Executive’s termination if the Executive elected continuation coverage under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for a period of twelve (12) months (the “Severance”). The Severance amount, less all required withholdings and authorized deductions, shall be paid in substantially equal installments consistent with the applicable regularly scheduled payroll procedures until the Severance has been paid in full, subject to Section 3.1(d) below.

(d)Except as otherwise required by Section 3.8, the benefits described in Section 3.1(c) shall begin within sixty (60) days after Executive’s termination date, provided Executive has timely executed and not revoked the Release within such sixty (60) day period; and provided that notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of Executive’s execution of the Release, directly or indirectly, result in Executive’s designating the calendar year of payment, and if a payment that is “nonqualified deferred compensation” as defined under Section 409A of the Code (“Section 409A”) is subject to execution of the Release could be made in more than one taxable year of Executive, payment shall be made on the earliest date permitted under the terms of the Release in the later such taxable year.

(e)Executive agrees and acknowledges that the Severance provided to Executive pursuant to Section 3.1(c) is in lieu of, and is not in addition to, any benefits to which Executive may otherwise be entitled under any Company or T2 Systems severance plan, policy, or program, other than the Guaranteed Payments.

(f)Executive agrees and acknowledges that if Executive fails to comply with Sections 5, 6, 7, 8 or 9 below, or any obligation set forth in the Release, all payments under Section 3.1(c) shall immediately cease and Executive shall be required to immediately repay any cash Severance previously paid by the Company.

3.2Termination by Reason of Disability. Subject to applicable state and federal law, the Company may terminate Executive’s employment if Executive has been unable to perform the material duties of Executive’s position for a period of ninety (90) consecutive days or one hundred eighty (180) days in the aggregate during any twelve (12) month period because of physical or mental injury or illness (“Disability”). Executive agrees, in the event of a dispute under this Section 3.2 relating to Executive’s Disability, to submit to a physical examination by a licensed physician jointly selected by the Board and Executive. If the Company terminates Executive’s employment for Disability, Executive shall be entitled to receive the Guaranteed Payments as set forth in Section 3.1(b). Nothing in this Section 3.2 shall be construed to waive Executive’s rights, if any,

_______

Executive’s Initials

under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

3.3Termination by Reason of Death. If Executive dies while employed by the Company, all obligations of the parties hereunder shall terminate immediately. The Company shall pay to Executive’s executor, legal representative, administrator or designated beneficiary, as applicable, the Guaranteed Payments as set forth in Section 3.1(b).

3.4Termination by Company for Cause or Resignation by Executive without Good Reason. The Company may terminate Executive’s employment at any time for Cause upon written notice to Executive and Executive may initiate a termination of employment by resigning without Good Reason upon not less than thirty (30) days’ prior written notice to the Company, and in any such event all payments under this Agreement shall cease except that the Company shall pay to Executive the Guaranteed Payments. In such event, Executive will not receive the Severance or any other severance compensation or benefits.

3.5Notice of Termination. Any termination of Executive’s employment by either party shall be communicated by a written notice of termination to the other party hereto given in accordance with Section 13. The notice of termination shall (a) indicate the specific termination provision in this Agreement relied upon; (b) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof, provided, that no basis need be provided by the Company in connection with a termination without Cause by the Company or a termination without Good Reason by Executive; and (c) specify the termination date in accordance with the requirements of this Agreement. Notwithstanding the foregoing, in the event that Executive gives a notice of termination to the Company, the Company may unilaterally accelerate the date of termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

3.6Cooperation with the Company After Termination. During any notice period preceding termination of Executive’s employment for any reason, Executive agrees to cooperate with the Company in all matters relating to the winding up of Executive’s pending work and the orderly transfer and transition of any such pending work to such other employees as may be designated by the Company. Following termination of employment, Executive agrees to cooperate with the Company, at reasonable times and locales and upon reasonable prior notice, in (a) responding to requests by the Company for information concerning work performed by Executive during the period of Executive’s employment with the Company and with regard to any matters that relate to or arise out of the business of the Company during the period of his employment and about which Executive may have knowledge; and (b) any investigation or review that may be performed by the Company or any government authority or in connection with any litigation or proceeding in which the Company, or any of its direct or indirect subsidiaries and affiliates may become involved. Executive’s obligations under this Section 3.6 include (without limitation) (i)

_______

Executive’s Initials

making himself available to testify on behalf of the Company or any of its affiliates in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative; (ii) assisting the Company or any of its affiliates in any such action, suit, or proceeding, by providing truthful and accurate information; (iii) and meeting and consulting with the Board or its representatives or counsel, or representatives or counsel to any of the Company’s affiliates as may be reasonably requested and after taking into account the Executive’s post-termination responsibilities and obligations. The Company will reimburse Executive for any reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.

3.7Definitions.

(a)“Cause” shall mean: (i) Executive being charged with a felony or misdemeanor criminal offense, other than a misdemeanor traffic offense; (ii) Executive’s engagement in any act involving gross misconduct or dishonesty that is materially injurious to the Company or any of its affiliates; (iii) Executive’s willful and continued breach of, or failure to substantially perform under or comply with any of the material terms and covenants of any written agreement with the Company or any of its affiliates; (iv) Executive’s willful and continued breach of, or refusal or failure substantially to perform under, any policy or reasonable performance goals set by the Company or any of its affiliates with respect to Executive’s job duties or responsibilities, the operation of the Company's or any of its affiliates’ business and affairs, or the management of the Company’s or any of its affiliates’ employees; or (v) Executive commits or has committed a breach of any laws or regulations which may affect or relate to the conduct of the Company’s or any of its affiliates’ business; provided, however, that with respect to (iii) and (iv) above, Executive will be provided notice of any misconduct and/or breach constituting Cause and be given a reasonable opportunity (not to exceed thirty (30) consecutive days) to cure the misconduct and/or breach (unless such misconduct and/or breach is determined by the Company not to be susceptible to cure, in which case the termination shall be deemed to be immediate), and provided further that such cure period shall only be available for the first such act of misconduct and/or breach of the same or substantially similar type, and subsequent acts of misconduct and/or breach of the same or substantially similar type shall constitute Cause without regard to Executive’s subsequent cure of same.

(b) “Good Reason” shall mean the occurrence of any of the following events or conditions, unless Executive has expressly consented in writing thereto:

(i)A material reduction in Executive’s Base Salary;

(ii)The material diminution of Executive’s duties, responsibilities, or authority, provided that Good Reason shall not exist under this clause (ii) if such diminution of authority, duties and responsibilities is a result of the hiring of additional subordinates to assume some of Executive’s duties and responsibilities which are in fact, in the aggregate from time to time, not a material diminution of such authority, duties and responsibilities as President, T2 Systems;

_______

Executive’s Initials

(iii)The Company requires that Executive’s principal office location be moved to a location more than fifty (50) miles from Executive’s principal office location immediately before the change without Executive’s prior consent; or

(iv)A material breach by the Company of this Agreement or any other written agreement between the parties.

For purposes of this Agreement, Executive shall not have Good Reason for termination unless (i) Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) Executive notifies the Company in writing of the occurrence of the Good Reason condition within sixty (60) days of such occurrence; (iii) Executive cooperates in good faith with the Company’s efforts, for a period not less than thirty (30) days following such notice (the “Cure Period”), to cure the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist following expiration of the Cure Period as determined by the Company; and (v) Executive terminates his employment within sixty (60) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

3.8Required Postponement for Specified Executives. If Executive is considered a “specified employee” (as defined under Section 409A) and payment of any amounts under this Agreement is required to be delayed for a period of six (6) months after separation from service pursuant to Section 409A, payment of such amounts shall be delayed as required by Section 409A, and the accumulated postponed amounts shall be paid in a lump-sum payment within five (5) days after the end of the six (6) month period. If Executive dies during the postponement period prior to the payment of benefits, the amounts postponed on account of Section 409A shall be paid to the personal representative of Executive’s estate within thirty (30) days after the date of Executive’s death.

4.Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company and for which Executive may qualify; provided, however, that if Executive becomes entitled to and receives the Severance provided for in Section 3 of this Agreement, Executive hereby waives Executive’s right to receive payments under any severance plan or similar program that would otherwise apply to Executive. In the event of any inconsistency between this Agreement and any other plan, program or agreement in which Executive is a participant or a party, this Agreement shall control unless such other plan, program or agreement specifically refers to this Agreement as not so controlling.

5.Confidentiality. Executive agrees that Executive’s services to the Company are of a special, unique and extraordinary character, and that Executive’s position places Executive in a position of confidence and trust with the Company’s customers, clients, vendors, suppliers, contractors, business partners and employees. Executive also recognizes that Executive’s position with the Company will give Executive substantial access to Confidential Information (as defined

_______

Executive’s Initials

below), the unauthorized use or disclosure of which to competitors of the Company would cause the Company to suffer substantial and irreparable damage. Executive recognizes and agrees, therefore, that it is in the Company’s legitimate business interest to restrict Executive’s use of Confidential Information for any purposes other than the proper discharge of Executive’s employment duties for the Company, and to limit any potential appropriation of Confidential Information by Executive for the benefit of the Company’s competitors and/or to the detriment of the Company. Accordingly, Executive agrees as follows:

(a)Executive shall not at any time, whether during or after the termination of Executive’s employment with the Company for any reason, reveal or disclose to any person or entity any of the trade secrets or confidential information of the Company, or the trade secrets or confidential information of any third party which the Company is under an obligation to keep confidential, including but not limited to trade secrets or confidential information respecting products, projects, designs, developmental or experimental work, computer programs, software, data bases, know-how, processes, formulas, customers, business partners, suppliers, business plans, marketing plans and strategies, finances, employee compensation, or personnel, information obtained from third parties under confidentiality agreements, and other business information (“Confidential Information”), except as may be required in the ordinary course of performing Executive’s duties as an employee of the Company, and Executive shall keep secret all Confidential Information entrusted to Executive and shall not use or attempt to use any such Confidential Information for personal gain or in any manner that may injure or cause loss, or could reasonably be expected to injure or cause loss, whether directly or indirectly, to the Company.

(b)The above restrictions shall not apply to: (i) information that at the time of disclosure is in the public domain through no fault of Executive; (ii) information received from a third party outside of the Company that was disclosed without a breach of any confidentiality obligation on the part of such third party; (iii) information released or disclosed by an authorized representative of the Company; or (iv) information that may be required by law or an order of any court, agency or proceeding to be disclosed; provided that Executive shall provide the Company prior written notice of any such required disclosure once Executive has knowledge of it and will help the Company to the extent reasonable to obtain an appropriate protective order. Moreover, the foregoing shall not limit Executive’s ability to (A) discuss the terms of Executive’s employment, wages and working conditions to the extent expressly protected by applicable law, (B) report possible violations of federal securities laws to the appropriate government enforcing agency and make such other disclosures that are expressly protected under federal or state “whistleblower” laws, or (C) respond to inquiries from, or otherwise cooperate with, any governmental or regulatory investigation or proceeding.

(c)Executive agrees that during Executive’s employment with the Company Executive shall not take, use or permit to be used any records, data, notes, reports, proposals, lists, correspondence, computer code, specifications, drawings, blueprints, sketches, flow diagrams, materials, equipment, devices or any other documents or property (including photocopies or other reproductions of any of the aforesaid items) or other materials of any nature constituting

_______

Executive’s Initials

Confidential Information or Developments (as defined below) otherwise than for the benefit of the Company. Executive further agrees that Executive shall not, after the termination of Executive’s employment for any reason, use or permit to be used any such records, data, notes, reports, proposals, lists, correspondence, computer code, specifications, drawings, blueprints, sketches, flow diagrams, materials, equipment, devices or any other documents or property (including photocopies or other reproductions of any of the aforesaid items), it being agreed that all of the foregoing shall be and remain the sole and exclusive property of the Company and that, immediately upon the termination of Executive’s employment for any reason, Executive shall deliver all of the foregoing, and all copies thereof, to the Company, at its main office.

(d)Executive agrees that upon the termination of Executive’s employment with the Company for any reason, Executive shall not take or retain without written authorization any documents, files or other property of the Company, and Executive will return promptly to the Company any such documents, files or property in Executive’s possession or custody, including any copies thereof maintained in any medium or format. Executive recognizes that all documents, files and property that Executive has received and will receive from the Company (with the exception of documents relating to benefits to which Executive might be entitled following the termination of Executive’s employment with the Company), are for the exclusive use of the Company and employees who are discharging their responsibilities on behalf of the Company, and that Executive has no claim or right to the continued use, possession or custody of such documents, files or property following the termination of Executive’s employment with the Company for any reason.

(e)Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive will not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(f)The obligations contained in this Section 5 are in addition to those set forth in Section 7(a) of the Prior Agreement, which expressly survive the amendment and restatement of the Prior Agreement.

6.Intellectual Property.

(a)If at any time or times during Executive’s employment with T2 Systems prior to the Start Date or thereafter with the Company (which, for purposes of this Section 6 shall be collectively referred to as the Company), Executive shall (either alone or with others) make, conceive, discover or reduce to practice any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation,

_______

Executive’s Initials

formula, data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) (herein called “Developments”) that (i) relates to the business of the Company or any of the products or services being developed, manufactured or sold by the Company or which may be used in relation therewith, (ii) results from tasks assigned to Executive by the Company or (iii) results from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for or by the Company, such Developments and the benefits thereof shall immediately become the sole and absolute property of the Company and its assigns, and Executive shall promptly disclose to the Company (or any persons designated by it) each such Development, and Executive hereby assigns any rights Executive may have or acquire in the Developments and benefits and/or rights resulting therefrom to the Company and its assigns without further compensation and shall communicate, without cost or delay, and without publishing the same, all available information relating thereto (with all necessary plans and models) to the Company.

(b)Upon disclosure of each Development to the Company, Executive will, during Executive’s employment and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require:

(i)to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and

(ii)to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.

(c)In the event the Company is unable, after reasonable effort, to secure Executive’s signature on any letters patent, copyright or other analogous protection relating to a Development, whether because of Executive’s physical or mental incapacity or for any other reason whatsoever, Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact for the sole purpose of acting for and on Executive’s behalf and in his stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, copyright and other analogous protection thereon with the same legal force and effect as if executed by Executive.

_______

Executive’s Initials

(d)The obligations contained in this Section 6 are in addition to those set forth in Section 7(b) of the Prior Agreement, which expressly survive the amendment and restatement of the Prior Agreement.

7.Non-Competition. During Executive’s employment with the Company and for a period of twelve (12) months after termination of Executive’s employment (for any reason whatsoever, whether voluntary or involuntary) (the “Non-Competition Period”), Executive shall not, without the prior written approval of the Board, whether alone or as a partner, officer, director, consultant, agent, employee, representative or stockholder of any company, entity, or other commercial enterprise, or in any other capacity, directly or indirectly engage in the business of creating, developing, manufacturing, marketing, selling and otherwise providing products, hardware, software, materials, maintenance or support services relating to (i) traffic control solutions, which include without limitation, photo, speed and red light automated enforcement technologies, parking systems, electronic toll collection, toll and traffic violation enforcement management, automated revenue collection processing systems and software, and related transaction processing operations, or (ii) parking management or payment solutions (including but not limited to permitting, enforcement and Parking Revenue Control Systems (PARCS), software solutions, multi-space meters, and vehicle counting) or the provision of related services, or (iii) any other products or services offered, conducted, authorized or provided by the Company during the last twelve (12) months of Executive’s employment (the “Business”), in any geographic regions for which Executive was responsible, or performed duties, on behalf of the Company during the last twelve (12) months of Executive’s employment, or in any geographic region in which the Company engaged in such business, or had developed plans to engage in such business, during the last twelve (12) months of Executive’s employment.

The foregoing Non-Competition prohibition shall not prevent Executive’s employment or engagement after termination of Executive’s employment by any company or business organization, so long as the activities of any such employment or engagement, in any capacity, do not involve work on matters related to the Business. Executive shall be permitted to own securities of a public company not in excess of five percent (5%) of any class of such securities and to own stock, partnership interests or other securities of any entity not in excess of five percent (5%) of any class of such securities and such ownership shall not be considered to be in competition with the Company.

8.Non-Solicitation. During Executive’s employment with the Company and for a period of eighteen (18) months after termination of such employment (for any reason, whether voluntary or involuntary), Executive agrees that Executive will not:

(a)directly or indirectly (i) solicit, entice or induce, or attempt to solicit, entice or induce, any customer or client to become a customer or client of any other person, firm or corporation with respect to any products or services then sold, offered, or under development by

_______

Executive’s Initials

the Company, or (ii) solicit, entice or induce, or attempt to solicit, entice or induce any customer, client, vendor, supplier, contractor, or business development partner to cease doing business with or any in way reduce or impair its business relationship with the Company, and Executive shall not approach or contact any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or

(b)directly or indirectly (i) solicit or recruit, or attempt to solicit or recruit, any employee, consultant or contractor of the Company to terminate employment or otherwise cease providing services to the Company or (ii) solicit or recruit, or attempt to solicit or recruit, any employee to work for or provide services to a third party other than the Company; and Executive shall not approach any such person for such purpose or authorize or knowingly approve the taking of such actions by any other person.

9.Non-Disparagement. During Executive’s employment and at all times following Executive’s termination of employment for any reason, Executive agrees not to make, or knowingly cause to be made, any public disparaging statement or public communication, written or oral, concerning the Company, or otherwise impugn the business or management of, damage the reputation of, or interfere with the normal operations of the Company or any of its respective past or present employees, executives, officers, directors, shareholders, members, managers, principals, or representatives. The foregoing prohibitions include, without limitation, (i) non-verbal comments or statements made on the Internet, including without limitation, on blogs, forums, social media platforms, review or rating sites, or any Internet site or online message board (including but not limited to LinkedIn and GlassDoor); and (ii) comments or statements to any person or entity, including without limitation, to the press or media, the Company, or any entity, customer, client, vendor, supplier, consultant or contractor with whom the Company has, has had or may in the future have a business relationship, that would in any way adversely affect the conduct of the business of the Company (including but not limited to any business plans or prospects) or the reputation of the Company or the aforementioned persons (including without limitation former and present employees of the Company). Nothing in this provision or elsewhere in this Agreement shall (a) affect the parties’ obligation to provide truthful information as may be required by law, rule, regulation or legal process, or as requested by any legal or regulatory authority, (b) unlawfully impair or interfere with Executive’s rights under Section 7 of the National Labor Relations Act, or (c) impair or in any way interfere with the Company’s ability to engage in intra-Company communications between or among officers, members of the Board, and/or their advisors related to Executive’s compensation, retention, and/or job performance.

10.General Provisions.

(a)Executive acknowledges and agrees that, for purposes of Sections 5, 6, 7, 8 and 9 of this Agreement, the term “Company” shall include Verra Mobility Corporation, VM Consolidated, Inc., and their direct and indirect subsidiaries and affiliates.

_______

Executive’s Initials

(b)Executive acknowledges and agrees that the type and periods of restrictions imposed in Sections 5, 6, 7, 8 and 9 of this Agreement are fair, reasonable and no greater than necessary to protect the Company’s legitimate business interests, and that such restrictions are intended solely to protect the legitimate interests of the Company, including its Confidential Information, goodwill (client, customer, employee, and otherwise), and business interests, and shall not in any way prevent Executive from earning a livelihood or impose upon Executive undue hardship. Executive recognizes and agrees that the Company competes and provides its products and services in numerous jurisdictions throughout the word, and that Executive’s access to Confidential Information makes it both reasonable and necessary for the Company to restrict Executive’s post-employment activities in any geographic market in which the Company competes or is developing plans to compete, and in which Executive’s access to Confidential Information and other proprietary information could be used to the detriment of the Company and for which the Company would have no adequate remedy at law. In the event that any restriction set forth in this Agreement is determined by a court of competent jurisdiction to be overbroad or unenforceable with respect to scope, time (duration), or geographical coverage, Executive agrees that such restriction or restrictions shall be modified and narrowed, either by such court of competent jurisdiction, or by the Company, to the least extent possible under applicable law for such restriction or restrictions to be enforceable so as to preserve and protect the legitimate interests of the Company as described in this Agreement, and without negating or impairing any other restrictions or agreements set forth herein.

(c)Executive acknowledges and agrees that should Executive breach any of the covenants, restrictions and agreements contained herein, irreparable loss and injury would result to the Company, monetary relief would not compensate for such breach, and damages arising out of such a breach would be difficult to fully ascertain. Executive therefore agrees that, in addition to any and all other remedies available at law or at equity, the Company shall be entitled to have the covenants, restrictions and agreements contained in Sections 5, 6, 7, 8 and 9 specifically enforced (including, without limitation, by temporary, preliminary, and permanent injunctions and restraining orders), without the need to post any bond or security, by any state or federal court in the State of Arizona having equity jurisdiction, and Executive agrees to be subject to the jurisdiction of such court and hereby waives any objection to the jurisdiction or venue thereof.

(d)Executive agrees that if the Company fails to take action to remedy any breach by Executive of this Agreement or any portion of the Agreement, such inaction by the Company shall not operate or be construed as a waiver of such breach or of any subsequent or other breach by Executive of the same or any other provision, agreement or covenant.

(e)Executive acknowledges and agrees that the payments and benefits to be provided to Executive under this Agreement are provided as, and constitute sufficient and adequate, consideration for the covenants in Sections 5, 6, 7, 8 and 9 hereof.

_______

Executive’s Initials

(f)Executive’s obligations under Sections 5, 6, 7, 8 and 9 shall survive the termination of Executive’s employment in accordance with their terms and shall remain in effect despite any change in position, title, duties, compensation, or other terms and conditions of Executive’s employment. The existence of a claim by Executive against Company, whether predicated on this Agreement or otherwise, shall not relieve Executive of Executive’s obligations under Sections 5, 6, 7, 8 or 9, or make those obligations unenforceable.

11.Representations and Warranties. Executive represents and warrants the following to the Company, each of which Executive acknowledges is a material inducement to the Company’s willingness to enter into this Agreement and a material provision of this Agreement:

(a)Other than as previously disclosed in writing or provided to the Company, Executive is not a party to or bound by any employment agreements, restrictive covenants, non-compete restrictions, non-solicitation restrictions, and/or confidentiality or non-disclosure agreements with any other person, business or entity, or any agreement or contract requiring Executive to assign inventions to another party (each, a “Restrictive Agreement”), and Executive has conducted a thorough review of any and all agreements he may have entered into with any current or former employer or any other relevant party to ensure that this representation and warranty is correct.

(b)No Restrictive Agreement prohibits, restricts, limits or otherwise affects Executive’s employment with the Company as an executive or ability to perform any of Executive’s duties or responsibilities for the Company as contemplated herein.

(c)Executive has not made any material misrepresentation or omission in the course of his communications with the Company regarding the Restrictive Agreements or other obligations to any current or former employer or other third party.

(d)Executive has not, directly or indirectly, removed, downloaded, or copied any confidential or proprietary information or records of any current or former employer (or their subsidiaries and/or affiliates) without the express written consent of an authorized representative of such entity, and shall not use or possess, as of the date Executive begins employment and at all times during his employment with the Company, any confidential or proprietary information or records of any current or former employer (or their subsidiaries and/or affiliates), whether in hard copy or electronic form, including, but not limited to, documents, files, disks, or other materials, all of which Executive is prohibited from using in connection with his employment with the Company.

12.Survivorship. The respective rights and obligations of the parties under this Agreement, including but not limited to those rights and obligations set forth in Sections 5, 6, 7, 8

_______

Executive’s Initials

and 9 hereof shall survive termination of Executive’s employment and any termination of this Agreement for any reason to the extent necessary to the intended preservation of such rights and obligations.

13.Notices. All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand-delivered or mailed by registered or certified mail, as follows (provided that notice of change of address shall be deemed given only when received):

If to the Company, to:

VM Consolidated, Inc.

1150 North Alma School Road

Mesa, AZ 85201

Attn: General Counsel

If to Executive, to the address of his principal residence most recently on file with the Company; or to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section 13.

14.Contents of Agreement, Amendment, Interpretation and Assignment.

(a)This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings concerning Executive’s employment by the Company or its predecessors (including, for the avoidance of doubt, the Prior Agreement other than Section 7 of the Prior Agreement) and cannot be changed or modified except upon written amendment approved by the Board and executed on its behalf by a duly authorized officer and by Executive.

(b)The headings in this Agreement are for convenience only, and both parties agree that they shall not be construed or interpreted to modify or affect the construction or interpretation of any provision of this Agreement.

(c)All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by Executive.

_______

Executive’s Initials

15.Severability. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated by a court of competent jurisdiction to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement that can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.

16.Remedies Cumulative; No Waiver. No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall operate or be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion.

17.Withholding. All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement other than such taxes that are, by their nature, obligations of the Company (for example, and without limitation, the employer portion of the Federal Insurance Contributions Act (FICA) taxes).

18.Counterparts. This Agreement may be executed in counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. Facsimile signatures and signatures transmitted by PDF shall be equivalent to original signatures.

19.Governing Law; Jurisdiction. This Agreement shall be governed by and interpreted under the laws of the State of Arizona without giving effect to (i) any conflicts-of-law provisions or choice of law provisions of the State of Arizona or of any other jurisdiction which provisions (if applied) would result in the application of the laws of any other jurisdiction other than of the State of Arizona, or (ii) canons of construction or principles of law that construe agreements against the draftsperson. Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court located in Arizona or any state court located within such state, in respect of any claim, dispute, or controversy in any way arising out of or relating to this Agreement or Executive’s employment with the Company or the termination thereof, and each

_______

Executive’s Initials

party hereby waives, and agrees not to assert as a defense in any action, suit or proceeding in which any such claim is made, that such party is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts. Any appellate proceedings shall take place in the appropriate courts having appellate jurisdiction over the courts set forth in this Section 19.

20.Section 409A. This Agreement is intended to comply with or otherwise be exempt from Section 409A and its corresponding regulations, to the extent applicable, and shall be so construed. Notwithstanding anything in this Agreement to the contrary, payments of “nonqualified deferred compensation” subject to Section 409A may only be made under this Agreement upon an event and in a manner permitted by Section 409A, to the extent applicable. For purposes of Section 409A, all payments of “nonqualified deferred compensation” subject to Section 409A to be made upon the termination of Executive’s employment under this Agreement may only be made upon a “separation from service” under Section 409A. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall Executive, directly or indirectly, designate the calendar year of payment with respect to any amount that is “nonqualified deferred compensation” subject to Section 409A. All reimbursements provided under this Agreement that are “nonqualified deferred compensation” that is subject to Section 409A shall be made or provided in accordance with Section 409A, including, where applicable, the requirements that (a) any reimbursement is for expenses incurred during the Employment Period (or during such other time period specified in this Agreement), (b) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (c) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (d) the right to reimbursement is not subject to liquidation or exchange for another benefit. Nothing herein shall be construed as having modified the time and form of payment of any amounts or payments of “nonqualified deferred compensation” within the meaning Section 409A that were otherwise payable pursuant to the terms of any agreement between Company and Executive in effect prior to the date of this Agreement.

21.Section 280G of the Code. Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or any of its affiliates to Executive or for Executive’s benefit pursuant to the terms of this Agreement or otherwise (the “Covered Payments”) constitute parachute payments (the “Parachute Payments”) within the meaning of Section 280G of the Code and, but for this Section 21, would be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under (i) above is less than the

_______

Executive’s Initials

amount under (ii) above will the Covered Payments be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the “Reduced Amount”). “Net Benefit” shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes.

(a)Any such reduction shall be made in accordance with Section 409A and the following:

(i)the Covered Payments consisting of cash severance benefits that do not constitute nonqualified deferred compensation subject to Section 409A shall be reduced first, in reverse chronological order; and

(ii)all other Covered Payments consisting of cash payments, and Covered Payments consisting of accelerated vesting of equity based awards to which Treas. Reg. §1.280G-1 Q/A-24(c) does not apply, and that in either case do not constitute nonqualified deferred compensation subject to Section 409A, shall be reduced second, in reverse chronological order;

(iii)all Covered Payments consisting of cash payments that constitute nonqualified deferred compensation subject to Section 409A shall be reduced third, in reverse chronological order; and

(iv)all Covered Payments consisting of accelerated vesting of equity-based awards to which Treas. Reg. § 1.280G-1 Q/A-24(c) applies shall be the last Covered Payments to be reduced.

(b)Any determination required under this Section 21 shall be made in writing in good faith by an independent accounting firm selected by the Company and reasonably acceptable to the Executive (the “Accountants”). The Company and Executive shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 21. For purposes of making the calculations and determinations required by this Section 21, the Accountants may rely on reasonable, good-faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Accountants’ determinations shall be final and binding on the Company and Executive. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 21.

(c)It is possible that after the determinations and selections made pursuant to this Section 21 Executive will receive Covered Payments that are in the aggregate more than the amount intended or required to be provided after application of this Section 21 (“Overpayment”) or less than the amount intended or required to be provided after application of this Section 21 (“Underpayment”).

(i)In the event that: (A) the Accountants determine, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or Executive that the Accountants believe has a high probability of success, that an Overpayment has been made or (B) it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved that an Overpayment has been made,

_______

Executive’s Initials

then Executive shall pay any such Overpayment to the Company together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date of Executive’s receipt of the Overpayment until the date of repayment.

(ii)In the event that: (A) the Accountants, based upon controlling precedent or substantial authority, determine that an Underpayment has occurred or (B) a court of competent jurisdiction determines that an Underpayment has occurred, any such Underpayment will be paid promptly by the Company to or for the benefit of Executive together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date the amount should have otherwise been paid to Executive until the payment date.

[Signature Page Follows.]

_______

Executive’s Initials

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.

COMPANY	EMPLOYEE:
By: /s/ David Roberts	By: /s/ Adam Blake
David Roberts	Adam Blake
Chief Executive Officer
Dated: October 20, 2021	Dated: October 20, 2021

EX-10

Exhibit 10.32

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by and between VM Consolidated, Inc., a Delaware corporation having its principal offices in Mesa, Arizona and a wholly owned subsidiary of Verra Mobility Corporation (together with Verra Mobility Corporation, the “Company”), and Jon Keyser (the “Executive”). This Agreement shall become effective on the date of the last signatory hereto, provided, however, that the Agreement is fully executed by November 8, 2022. If the Agreement is not fully executed by November 8, 2022, it shall become null and void.

WHEREAS, the Company desires to employ Executive as its Executive Vice President and Chief Legal Officer, and Executive desires to serve in such capacity on behalf of the Company, upon the terms and conditions hereinafter set forth; and

WHEREAS, Executive acknowledges that he has had an opportunity to consider this Agreement and to consult with an independent advisor of his choosing with regard to the terms of this Agreement, and enters into this Agreement voluntarily and with a full understanding of its terms.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1.Employment.

1.1Employment Period. Executive’s employment hereunder will commence on or before December 19, 2022 (the “Start Date”). Executive shall be employed by the Company (or a Company subsidiary or affiliate) on an “at will” basis; meaning either the Company or Executive may terminate Executive’s employment at any time, with or without cause or advance notice (such period of employment under the Agreement (the “Employment Period”). Any contrary representations that may have been made to Executive shall be superseded by this Agreement. This Agreement shall constitute the full and complete agreement between Executive and the Company on the “at will” nature of Executive’s employment with the Company, which may be changed only in an express written agreement signed by Executive and a duly authorized officer of the Company. Executive’s rights to any compensation following a termination shall be only as set forth in Section 3 herein.

1.2Public Announcement. Prior to any public announcement made by the Company, Executive shall not make any public release, statement or communication concerning Executive’s acceptance of employment with the Company without the prior written approval of the Company’s Board of Directors (the “Board”) or its designee.

1.3Duties and Responsibilities. Commencing on the Start Date, Executive shall serve as the Executive Vice President and Chief Legal Officer (“Title”) of the Company, reporting to

_______

Executive’s Initials

the Company’s Chief Executive Officer, and shall perform all duties and accept all responsibilities incident to such position and such other duties as may be reasonably assigned to Executive by the Company’s Chief Executive Officer consistent with such position.

1.4Extent of Services. Executive shall use his best efforts to carry out Executive’s duties and responsibilities under Section 1.3 hereof and, consistent with the other provisions of this Agreement, shall devote substantially all of Executive’s business time, attention and energy thereto. In the performance of his duties, Executive shall observe and adhere to all applicable Company policies and procedures as may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion. During the Employment Period, Executive may engage in volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable organization as Executive may wish to serve, in all such cases not interfering with Executive’s responsibilities and performance of Executive’s duties hereunder. The foregoing shall not be construed as preventing Executive from owning less than one percent (1%) of the total outstanding shares of a publicly traded company.

1.5Principal Location of Services. Executive shall perform his duties hereunder principally out of the Company’s corporate headquarters (presently located in Mesa, Arizona) and shall undertake such travel within or outside of the United States as is necessary or advisable for the efficient operations of the Company and the performance of Executive’s duties hereunder. For the first eight (8) months of Executive’s employment (the “Commuting Period”), Executive shall be permitted to telecommute from his current home location, with the expectation that Executive relocate to the greater Phoenix metropolitan area by the end of the Commuting Period (such relocation benefits to be governed by Section 2.8 of this Agreement). During the Commuting Period, Executive shall be reimbursed for his travel expenses when required to attend meetings in person at the Company’s Mesa headquarters in accordance with the Company’s Travel & Expense Policy.

1.6Background Screening. Executive’s employment is contingent upon completion of the Company’s Director & Officer Questionnaire to the Company’s satisfaction, verification of Executive’s eligibility to work in the United States, and the Company obtaining satisfactory results on a background investigation, reference check, and drug screening of Executive (collectively, the “Background Check”), which will be conducted at the Company’s expense and in compliance with applicable law. If the results of Executive’s Background Check do not meet the Company’s satisfaction, the Agreement shall be null and void (even if executed by the Parties).

2.Compensation and Benefits.

2.1Base Salary. For all the services rendered by Executive hereunder, the Company shall pay or cause to be paid to Executive a base salary (“Base Salary”) at the annualized rate of Four Hundred Thousand Dollars ($400,000.00), subject to all required withholdings and

_______

Executive’s Initials

authorized deductions and payable in installments at such times as the Company customarily pays its other employees. Executive’s Base Salary is subject to annual review by the Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors (the “Board”) consistent with other members of the Company’s executive team.

2.2Short-Term Discretionary Cash Bonus.For each fiscal year during the Employment Period, Executive shall be eligible to receive an annual discretionary cash bonus (the “STIP Bonus”) for the services rendered by Executive under this Agreement, subject to the terms and conditions as set forth in the Verra Mobility Short-Term Incentive Plan (or any successor plan) (the “Incentive Plan”). Executive’s STIP Bonus target shall be 70% of the Executive’s Base Salary for the applicable plan year as defined in the Incentive Plan. The payment and amount of the STIP Bonus, if any, will be determined by the Compensation Committee based on Executive’s individual performance and Company performance, in each case measured against performance goals and targets established by the Compensation Committee.

2.3Equity Compensation.

(a)As soon as practicable (but not more than two (2) business days after the first Compensation Committee meeting immediately following Executive’s Start Date (or, if the Compensation Committee’s next such meeting occurs during a blackout period, then promptly after two (2) business days following the end of such blackout period), the Company will grant to Executive, pursuant to the terms of the Verra Mobility Corporation 2018 Equity Incentive Plan, as amended (the “Equity Plan”), and applicable award agreements, the following equity grants:

(i)Time-Based Stock Option Grant.A grant of a non-statutory stock option award under the Equity Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to Two Hundred Thousand Dollars ($200,000.00) (the “Time-Based Option”), subject to the Equity Plan and Executive’s Time-Based Option award agreement, which shall include an annual time-based vesting of twenty-five percent (25%) increments on each of the first four anniversaries of the grant date, including continued service through each applicable vesting date. The Time-Based Option will have an exercise price per share equal to the Fair Market Value (as defined in the Equity Plan) of a share of common stock of the Company on the date of grant.

(ii)Performance Share Unit Grant. A grant of a performance share unit award under the Equity Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to One Hundred and Fifty Thousand Dollars ($150,000.00) (“PSUs”), subject to the Plan and Executive’s PSU award agreement, which shall include the following vesting schedule: the PSUs shall vest based on Relative Total

_______

Executive’s Initials

Stockholder Return (“Relative TSR”), meaning the difference, measured in percentage points (rounded to the nearest 1/100 of 1%), for the three (3) year performance period between the Company Annualized TSR and the Comparator Group Median Annualized TSR, all as determined in accordance with Executive’s PSU award agreement, as well as Executive’s continued service through the end of the performance period.

(iii)Time-Based Restricted Stock Unit Grant. A grant of a restricted stock unit award under the Equity Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to One Hundred and Fifty Thousand Dollars ($150,000.00) (“RSUs”), subject to the Equity Plan and Executive’s RSU award agreement, which shall include annual time-based vesting of twenty-five percent (25%) increments on each of the successive four anniversaries of the grant date and the terms of the Equity Plan and Executive’s RSU award agreement, including continued service through each applicable vesting date.

(iv)Make-Whole Restricted Stock Unit Grant. A grant of a restricted stock unit award under the Equity Plan for a number of shares of Verra Mobility Class A Common Stock with a total value, as measured by the closing price of Verra Mobility’s Class A Common Stock on the Nasdaq Capital Market on the date of grant, equal to Four Hundred and Fifty Thousand Dollars ($450,000.00) (the “Make-Whole RSUs”), which shall include annual time-based vesting of 33.33% increments on each of the three (3) anniversaries of the grant date and the terms of the Equity Plan and Executive’s RSU award agreement, including continued service through each applicable vesting date.

(b)During the Employment Period, Executive shall be eligible from time to time to participate in the Company’s equity incentive programs, subject to the discretion of the Board or its authorized designee(s). The terms and conditions of the vesting, forfeiture, and all other matters related to any equity compensation granted to Executive shall be subject to and governed by the Equity Plan and the applicable award agreements and grant documents provided to Executive in connection with such equity compensation.

2.4Retirement and Welfare Plans. Executive shall be eligible to participate in employee retirement and welfare benefit plans of the Company (or a Company subsidiary or affiliate) made available to the Company’s (or its subsidiaries’ or affiliates’) senior level executives as a group or to its employees generally, as such retirement and welfare plans may be in effect from time to time and subject to the eligibility requirements of the plans. Nothing in this Agreement shall prevent the Company from adopting, amending or terminating any retirement, welfare or other employee benefit plans or programs from time to time as the Company deems appropriate.

_______

Executive’s Initials

2.5Vacation. Executive shall be entitled to paid vacation pursuant to the terms and conditions of the Company’s vacation and paid time off policies, as may be in effect from time to time.

2.6Reimbursement of Expenses. Executive shall be eligible to be reimbursed for all customary and appropriate business-related expenses actually incurred by Executive and documented in accordance with the Company’s policies applicable to senior level executives and as may be in effect from time to time.

2.7Sign-On Bonus.

(a)The Company shall provide a sign-on cash bonus of Two Hundred Thousand Dollars ($200,000.00) (the “Sign-On Bonus”), subject to all required and authorized withholdings. Such Sign-On Bonus shall be paid within thirty (30) days after the Executive’s Start Date.

(b)Executive shall be obligated to immediately repay One Hundred Percent (100%) of the gross amount of the Sign-On Bonus if Executive is terminated by the Company for Cause (as defined in Section 3.7) or if Executive voluntarily terminates his employment other than for Good Reason (as defined in Section 3.7), and other than due to Disability (as defined in Section 3.2) or death, prior to the one-year anniversary of the Start Date. Executive shall be obligated to immediately repayFifty Percent (50%) of the gross amount of the Sign-On Bonus if Executive is terminated by the Company for Cause (as defined in Section 3.7) or if Executive voluntarily terminates his employment other than for Good Reason (as defined in Section 3.7), and other than due to Disability (as defined in Section 3.2) or death, after the one-year anniversary of the Start Date but prior to the two-year anniversary of the Start Date.

2.8Relocation Assistance. In connection with Executive’s relocation to the greater Phoenix metropolitan area at the end of the Commuting Period, Executive will be entitled to relocation assistance benefits, a summary of which is attached as Exhibit A hereto. Executive shall be obligated to repay the actual expenses incurred by the Company related to shipment of household goods and home purchase expenses in the event Executive is terminated by the Company for Cause (as defined in Section 3.7) or if Executive voluntarily terminates his employment other than for Good Reason (as defined in Section 3.7), and other than due to Disability (as defined in Section 3.2) or death, within twenty (20) months after Executive’s Start Date.

_______

Executive’s Initials

3.Termination. Notwithstanding Section 1, Executive’s employment shall terminate, and the Employment Period shall terminate concurrently therewith, upon the occurrence of any of the following events:

3.1Termination By Company Without Cause or Resignation by Executive for Good Reason.

(a)The Company may terminate Executive’s employment at any time without Cause during the Employment Period from the position in which Executive is employed hereunder upon not less than thirty (30) days’ prior written notice to Executive. The Company shall have the discretion to terminate Executive’s employment during the notice period and pay continued Base Salary in lieu of notice. In addition, Executive may initiate a termination of employment under this Section 3.1 by resigning for Good Reason (in accordance with the notice and other provisions set forth in Section 3.7(b)).

(b)Upon termination under this Section 3.1, Executive shall receive (i) Executive’s accrued but unpaid Base Salary through the date of termination (payable with the first regular Company payroll processed after Executive’s date of termination or earlier if required by applicable law), (ii) any unreimbursed business expenses incurred by Executive and payable in accordance with the Company’s standard expense reimbursement policies and Section 20 of this Agreement, and (iii) benefits earned, accrued and due under any qualified retirement plan or health and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan (collectively, the amounts in this Section 3.1(b) are “Guaranteed Payments”).

(c)If Executive’s employment terminates as described in Section 3.1(a) above and if, upon such termination, Executive (i) executes within twenty-one (21) days (or forty-five (45) days to the extent required by applicable law) after presentation to the Executive, that Executive does not timely revoke, a written general release in a form provided by the Company releasing the Company from any and all claims (including with respect to all matters arising out of or related to Executive’s employment by the Company or the termination thereof) (the “Release”), and (ii) complies with the terms and conditions of the Release, including, without limitation, the terms and conditions of Sections 5, 6, 7, 8, and 9 of this Agreement (which shall be incorporated in the Release by reference) below, Executive will be entitled to receive cash severance in an amount equal to twelve (12) months of Executive’s then-current Base Salary, plus a cash amount representing the total cost of the group healthcare premiums the Executive would have paid based on the coverages in effect at the time of Executive’s termination if the Executive elected continuation coverage under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for a period of twelve (12) months (the “Severance”). The Severance amount, less all required withholdings and authorized deductions, shall be paid in substantially

_______

Executive’s Initials

equal installments consistent with the Company’s regularly scheduled payroll procedures until the Severance has been paid in full, subject to Section 3.1(d) below.

(d)Except as otherwise required by Section 3.8, the benefits described in Section 3.1(c) shall begin within sixty (60) days after Executive’s termination date, provided Executive has timely executed and not revoked the Release within such sixty (60) day period; and provided that notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of Executive’s execution of the Release, directly or indirectly, result in Executive’s designating the calendar year of payment, and if a payment that is “nonqualified deferred compensation” as defined under Section 409A of the Code (“Section 409A”) is subject to execution of the Release could be made in more than one taxable year of Executive, payment shall be made on the earliest date permitted under the terms of the Release in the later such taxable year.

(e)Executive agrees and acknowledges that the Severance provided to Executive pursuant to Section 3.1(c) is in lieu of, and is not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, guideline, policy, or program, other than the Guaranteed Payments.

(f)Executive agrees and acknowledges that if Executive fails to comply with Section 5, 6, 7, 8 or 9 below, or any obligation set forth in the Release, all payments under Section 3.1(c) shall immediately cease and Executive shall be required to immediately repay any cash Severance previously paid by the Company.

3.2Termination by Reason of Disability. Subject to applicable state and federal law, the Company may terminate Executive’s employment if Executive has been unable to perform the material duties of Executive’s position for a period of ninety (90) consecutive days or one hundred eighty (180) days in the aggregate during any twelve (12) month period because of physical or mental injury or illness (“Disability”). Executive agrees, in the event of a dispute under this Section 3.2 relating to Executive’s Disability, to submit to a physical examination by a licensed physician jointly selected by the Board and Executive. If the Company terminates Executive’s employment for Disability, Executive shall be entitled to receive the Guaranteed Payments as set forth in Section 3.1(b).

3.3Termination by Reason of Death. If Executive dies while employed by the Company, all obligations of the parties hereunder shall terminate immediately. The Company shall pay to Executive’s executor, legal representative, administrator or designated beneficiary, as applicable, the Guaranteed Payments as set forth in Section 3.1(b).

_______

Executive’s Initials

3.4Termination by Company for Cause or Resignation by Executive without Good Reason. The Company may terminate Executive’s employment at any time for Cause upon written notice to Executive and Executive may initiate a termination of employment by resigning without Good Reason upon not less than thirty (30) days’ prior written notice to the Company, and in any such event all payments under this Agreement shall cease upon the termination date except that the Company shall pay to Executive the Guaranteed Payments. In such event, Executive will not receive the Severance or any other severance compensation or benefits.

3.5Notice of Termination. Any termination of Executive’s employment by either party shall be communicated by a written notice of termination to the other party hereto given in accordance with Section 13. The notice of termination shall (a) indicate the specific termination provision in this Agreement relied upon; (b) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof, provided, that no basis need be provided by the Company in connection with a termination without Cause by the Company or a termination without Good Reason by Executive; and (c) specify the termination date in accordance with the requirements of this Agreement.

3.6Cooperation with the Company After Termination. During any notice period preceding termination of Executive’s employment for any reason, Executive agrees to cooperate with the Company in all matters relating to the winding up of Executive’s pending work and the orderly transfer and transition of any such pending work to such other employees as may be designated by the Company. Following termination of employment, Executive agrees to cooperate with the Company, at reasonable times and locales and upon reasonable prior notice, in (a) responding to requests by the Company for information concerning work performed by Executive during the period of Executive’s employment with the Company and with regard to any matters that relate to or arise out of the business of the Company during the period of his employment and about which Executive may have knowledge; and (b) any investigation, inquiry, audit, review, or the like that may be performed by the Company (or any subsidiary or affiliate) or any government authority or in connection with any litigation or proceeding in which the Company (or any subsidiary or affiliate) may become involved. Executive’s obligations under this Section 3.6 include (without limitation) (i) making himself available to testify on behalf of the Company or a Company subsidiary or affiliate in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative; (ii) assisting the Company or a Company subsidiary or affiliate in any such action, suit, or proceeding, by providing truthful and accurate information; (iii) and meeting and consulting with the Board or its representatives or counsel, or representatives or counsel to any Company subsidiary or affiliate as may be reasonably requested and after taking into account the Executive’s post-termination responsibilities and obligations. The Company will reimburse Executive for any reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.

3.7Definitions.

_______

Executive’s Initials

(a)“Cause” shall mean: (i) Executive being charged with a felony or misdemeanor criminal offense, other than a misdemeanor traffic offense; (ii) Executive’s engagement in any act involving gross misconduct or dishonesty that is materially injurious to the Company or any Company subsidiary or affiliate; (iii) Executive’s willful and continued breach of, or failure to substantially perform under or comply with any of the material terms and covenants of any written agreement with the Company or any Company subsidiary or affiliate; (iv) Executive’s willful and continued breach of, or refusal or failure substantially to perform under, any policy or reasonable performance goals set by the Company or a Company subsidiary or affiliate with respect to Executive’s job duties or responsibilities, the operation of the Company's or its subsidiaries’ or affiliates’ business and affairs, or the management of the Company’s or employees of a Company subsidiary or affiliate; or (v) Executive commits or has committed a breach of any laws or regulations which may affect or relate to the conduct of the Company’s or the business of a Company subsidiary or affiliate; provided, however, that with respect to (iii) and (iv) above, Executive will be provided notice of any misconduct and/or breach constituting Cause and be given a reasonable opportunity (not to exceed thirty (30) consecutive days) to cure the misconduct and/or breach (unless such misconduct and/or breach is determined by the Company in its sole but reasonable discretion not to be susceptible to cure, in which case the termination shall be deemed to be immediate), and provided further that such cure period shall only be available for the first such act of misconduct and/or breach of the same or substantially similar type, and subsequent acts of misconduct and/or breach of the same or substantially similar type shall constitute Cause without regard to Executive’s subsequent cure of same.

(b) “Good Reason” shall mean the occurrence of any of the following events or conditions, unless Executive has expressly consented in writing thereto:

(i)A material reduction in Executive’s Base Salary;

(ii)The material diminution of Executive’s duties, responsibilities, or authority, provided that Good Reason shall not exist under this clause (ii) if such diminution of authority, duties and responsibilities is a result of the hiring of additional subordinates to assume some of Executive’s duties and responsibilities which are in fact, in the aggregate from time to time, not a material diminution of such authority, duties and responsibilities as Executive Vice President and General Counsel;

(iii)The Company requires that Executive’s principal office location be moved to a location more than fifty (50) miles from Executive’s principal office location immediately before the change without Executive’s prior consent; or

(iv)A material breach by the Company of this Agreement or any other written agreement between the parties.

_______

Executive’s Initials

For purposes of this Agreement, Executive shall not have Good Reason for termination unless (i) Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) Executive notifies the Company in writing of the occurrence of the Good Reason condition within sixty (60) days of such occurrence; (iii) Executive cooperates in good faith with the Company’s efforts, for a period not less than thirty (30) days following such notice (the “Cure Period”), to cure the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist following expiration of the Cure Period as determined by the Company; and (v) Executive terminates his employment within sixty (60) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

3.8Required Postponement for Specified Executives. If Executive is considered a “specified employee” (as defined under Section 409A) and payment of any amounts under this Agreement is required to be delayed for a period of six (6) months after separation from service pursuant to Section 409A, payment of such amounts shall be delayed as required by Section 409A, and the accumulated postponed amounts shall be paid in a lump-sum payment within five (5) days after the end of the six (6) month period. If Executive dies during the postponement period prior to the payment of benefits, the amounts postponed on account of Section 409A shall be paid to the personal representative of Executive’s estate within thirty (30) days after the date of Executive’s death.

4.Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company and for which Executive may qualify; provided, however, that if Executive becomes entitled to and receives the Severance provided for in Section 3 of this Agreement, Executive hereby waives Executive’s right to receive payments under any severance plan or similar program that would otherwise apply to Executive. In the event of any inconsistency between this Agreement and any other plan, program or agreement in which Executive is a participant or a party, this Agreement shall control unless such other plan, program or agreement specifically refers to this Agreement as not so controlling.

5.Confidentiality. Executive agrees that Executive’s services to the Company are of a special, unique and extraordinary character, and that Executive’s position places Executive in a position of confidence and trust with the Company’s customers, clients, vendors, suppliers, contractors, business partners and employees. Executive also recognizes that Executive’s position with the Company will give Executive substantial access to Confidential Information (as defined below), the unauthorized use or disclosure of which to competitors of the Company would cause the Company to suffer substantial and irreparable damage. Executive recognizes and agrees, therefore, that it is in the Company’s legitimate business interest to restrict Executive’s use of Confidential Information for any purposes other than the proper discharge of Executive’s employment duties for the Company, and to limit any potential appropriation of Confidential Information by Executive for the benefit of the Company’s competitors and/or to the detriment of the Company. Accordingly, Executive agrees as follows:

_______

Executive’s Initials

(a)Executive shall not at any time, whether during or after the termination of Executive’s employment with the Company or any Company affiliate for any reason, reveal or disclose to any person or entity any of the trade secrets or confidential information of the Company, or the trade secrets or confidential information of any third party which the Company is under an obligation to keep confidential, including but not limited to trade secrets or confidential information respecting products, projects, designs, developmental or experimental work, computer programs, software, data bases, know-how, processes, formulas, customers, business partners, suppliers, business plans, marketing plans and strategies, finances, employee compensation, or personnel, information obtained from third parties under confidentiality agreements, and other business information (“Confidential Information”), except as may be required in the ordinary course of performing Executive’s duties as an employee of the Company, and Executive shall keep secret all Confidential Information entrusted to Executive and shall not use or attempt to use any such Confidential Information for personal gain or in any manner that may injure or cause loss, or could reasonably be expected to injure or cause loss, whether directly or indirectly, to the Company.

(b)The above restrictions shall not apply to: (i) information that at the time of disclosure is in the public domain through no fault of Executive; (ii) information received from a third party outside of the Company that was disclosed without a breach of any confidentiality obligation on the part of such third party; (iii) information released or disclosed by an authorized representative of the Company; or (iv) information that may be required by law or an order of any court, agency or proceeding to be disclosed; provided that Executive shall provide the Company prior written notice of any such required disclosure once Executive has knowledge of it and will help the Company to the extent reasonable to obtain an appropriate protective order. Moreover, the foregoing shall not limit Executive’s ability to (A) discuss the terms of Executive’s employment, wages and working conditions to the extent expressly protected by applicable law, (B) report possible violations of federal securities laws to the appropriate government enforcing agency and make such other disclosures that are expressly protected under federal or state “whistleblower” laws, or (C) respond to inquiries from, or otherwise cooperate with, any governmental or regulatory investigation or proceeding.

(c)Executive agrees that during Executive’s employment with the Company Executive shall not take, use or permit to be used any records, data, notes, reports, proposals, lists, correspondence, computer code, specifications, drawings, blueprints, sketches, flow diagrams, materials, equipment, devices or any other documents or property (including photocopies or other reproductions of any of the aforesaid items) or other materials of any nature constituting Confidential Information or Developments (as defined below) otherwise than for the benefit of the Company. Executive further agrees that Executive shall not, after the termination of Executive’s employment for any reason, use or permit to be used any such records, data, notes, reports, proposals, lists, correspondence, computer code, specifications, drawings, blueprints, sketches, flow diagrams, materials, equipment, devices or any other documents or property (including photocopies or other reproductions of any of the aforesaid items), it being agreed that all of the foregoing shall be and remain the sole and exclusive property of the Company and that,

_______

Executive’s Initials

immediately upon the termination of Executive’s employment for any reason, Executive shall deliver all of the foregoing, and all copies thereof, to the Company, at its main office.

(d)Executive agrees that upon the termination of Executive’s employment with the Company for any reason, Executive shall not take or retain without written authorization any documents, files or other property of the Company, and Executive will return promptly to the Company any such documents, files or property in Executive’s possession or custody, including any copies thereof maintained in any medium or format. Executive recognizes that all documents, files and property that Executive has received and will receive from the Company (with the exception of documents relating to benefits to which Executive might be entitled following the termination of Executive’s employment with the Company), are for the exclusive use of the Company and employees who are discharging their responsibilities on behalf of the Company, and that Executive has no claim or right to the continued use, possession or custody of such documents, files or property following the termination of Executive’s employment with the Company for any reason.

(e)Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive will not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

6.Intellectual Property.

(a)If at any time or times during Executive’s employment with the Company Executive shall (either alone or with others) make, conceive, discover or reduce to practice any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula, data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) (herein called “Developments”) that (i) relates to the business of the Company or any of the products or services being developed, manufactured or sold by the Company or which may be used in relation therewith, (ii) results from tasks assigned to Executive by the Company or (iii) results from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company, such Developments and the benefits thereof shall immediately become the sole and absolute property of the Company and its assigns, and Executive shall promptly disclose to the Company (or any persons designated by it) each such Development, and Executive hereby assigns any rights Executive may have or acquire in the Developments and benefits and/or rights resulting therefrom to the Company and its assigns without further compensation and shall

_______

Executive’s Initials

communicate, without cost or delay, and without publishing the same, all available information relating thereto (with all necessary plans and models) to the Company.

(b)Upon disclosure of each Development to the Company, Executive will, during Executive’s employment and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require:

(i)to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and

(ii)to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.

(c)In the event the Company is unable, after reasonable effort, to secure Executive’s signature on any letters patent, copyright or other analogous protection relating to a Development, whether because of Executive’s physical or mental incapacity or for any other reason whatsoever, Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact for the sole purpose of acting for and on Executive’s behalf and in his stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, copyright and other analogous protection thereon with the same legal force and effect as if executed by Executive.

7.Non-Competition. During Executive’s employment with the Company and for a period of twelve (12) months after termination of Executive’s employment (for any reason whatsoever, whether voluntary or involuntary) (the “Non-Competition Period”), Executive shall not, without the prior written approval of the Board, whether alone or as a partner, officer, director, consultant, agent, employee, representative or stockholder of any company, entity, or other commercial enterprise, or in any other capacity, directly or indirectly engage in the business of developing, manufacturing, marketing, selling and otherwise providing products, hardware, software, materials and support services relating to traffic control solutions, which include without limitation, photo, speed and red light automated enforcement technologies, parking systems, electronic toll collection, toll and traffic violation enforcement management, automated revenue collection processing systems and software, related transaction processing operations for any of the foregoing, and any other products or services offered, conducted, authorized or provided by the Company during the last twelve (12) months of Executive’s employment (the “Business”), in any geographic regions for which Executive was responsible, or performed duties, on behalf of the

_______

Executive’s Initials

Company during the last twelve (12) months of Executive’s employment, or in any geographic region in which the Company engaged in such business, or had developed plans to engage in such business, during the last twelve (12) months of Executive’s employment.

The foregoing Non-Competition prohibition shall not prevent Executive’s employment or engagement after termination of Executive’s employment by any company or business organization, so long as the activities of any such employment or engagement, in any capacity, do not involve work on matters related to the Business. Executive shall be permitted to own securities of a public company not in excess of five percent (5%) of any class of such securities and to own stock, partnership interests or other securities of any entity not in excess of five percent (5%) of any class of such securities and such ownership shall not be considered to be in competition with the Company.

8.Non-Solicitation. During Executive’s employment with the Company and for a period of eighteen (18) months after termination of such employment (for any reason, whether voluntary or involuntary), Executive agrees that Executive will not:

(a)directly or indirectly (i) solicit, entice or induce, or attempt to solicit, entice or induce, any customer or client to become a customer or client of any other person, firm or corporation with respect to any products or services then sold, offered, or under development by the Company, or (ii) solicit, entice or induce, or attempt to solicit, entice or induce any customer, client, vendor, supplier, contractor, or business development partner to cease doing business with or any in way reduce or impair its business relationship with the Company, and Executive shall not approach or contact any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or

(b)directly or indirectly (i) solicit or recruit, or attempt to solicit or recruit, any employee, consultant or contractor of the Company to terminate employment or otherwise cease providing services to the Company or (ii) solicit or recruit, or attempt to solicit or recruit, any employee to work for or provide services to a third party other than the Company; and Executive shall not approach any such person for such purpose or authorize or knowingly approve the taking of such actions by any other person.

9.Non-Disparagement. During Executive’s employment and at all times following Executive’s termination of employment for any reason, Executive agrees not to make, or knowingly cause to be made, any public disparaging statement or public communication, written or oral, concerning the Company, or otherwise impugn the business or management of, damage the reputation of, or interfere with the normal operations of the Company, or any of their respective past or present employees, executives, officers, directors, shareholders, members, managers, principals, or representatives. The foregoing prohibitions include, without limitation, (i)

_______

Executive’s Initials

non-verbal comments or statements made on the Internet, including without limitation, on blogs, forums, social media platforms, review or rating sites, or any Internet site or online message board (including but not limited to LinkedIn, Indeed, Glassdoor, Facebook, and the like); and (ii) comments or statements to any person or entity, including without limitation, to the press or media, the Company, or any entity, customer, client, vendor, supplier, consultant or contractor with whom the Company has, has had or may in the future have a business relationship, that would in any way adversely affect the conduct of the business of the Company (including but not limited to any business plans or prospects) or the reputation of the Company, or the aforementioned persons (including without limitation former and present employees of the Company). Nothing in this provision or elsewhere in this Agreement shall (a) affect the parties’ obligation to provide truthful information as may be required by law, rule, regulation or legal process, or as requested by any legal or regulatory authority, (b) unlawfully impair or interfere with Executive’s rights under Section 7 of the National Labor Relations Act, or (c) impair or in any way interfere with the Company’s ability to engage in intra-Company communications between or among officers, members of the Board, and/or their advisors related to Executive’s compensation, retention, and/or job performance.

10.General Provisions.

(a)Executive acknowledges and agrees that, for purposes of Sections 5, 6, 7, 8, and 9 of this Agreement, the term “Company” shall include Verra Mobility Corporation, VM Consolidated, Inc., and their direct and indirect subsidiaries and affiliates.

(b)Executive acknowledges and agrees that the type and periods of restrictions imposed in Sections 7 and 8 of this Agreement are fair, reasonable and no greater than necessary to protect the Company’s legitimate business interests, and that such restrictions are intended solely to protect the legitimate interests of the Company, including its Confidential Information, goodwill (client, customer, employee, and otherwise), and business interests, and shall not in any way prevent Executive from earning a livelihood or impose upon Executive undue hardship. Executive recognizes and agrees that the Company competes and provides its products and services in numerous jurisdictions throughout the world, and that Executive’s access to Confidential Information makes it both reasonable and necessary for the Company to restrict Executive’s post-employment activities in any geographic market in which the Company competes or is developing plans to compete, and in which Executive’s access to Confidential Information and other proprietary information could be used to the detriment of the Company and for which the Company would have no adequate remedy at law. In the event that any restriction set forth in this Agreement is determined by a court of competent jurisdiction to be overbroad or unenforceable with respect to scope, time (duration), or geographical coverage, Executive agrees that such restriction or restrictions shall be modified and narrowed, either by such court of competent jurisdiction, or by the Company, to the least extent possible under applicable law for such restriction or restrictions to be enforceable so as to preserve and protect the legitimate interests of the Company as described in this Agreement, and without negating or impairing any other restrictions or agreements set forth herein.

_______

Executive’s Initials

(c)Executive acknowledges and agrees that should Executive breach any of the covenants, restrictions and agreements contained herein, irreparable loss and injury would result to the Company, monetary relief would not compensate for such breach, and damages arising out of such a breach would be difficult to fully ascertain. Executive therefore agrees that, in addition to any and all other remedies available at law or at equity, the Company shall be entitled to have the covenants, restrictions and agreements contained in Sections 5, 6, 7, 8, and 9 specifically enforced (including, without limitation, by temporary, preliminary, and permanent injunctions and restraining orders), without the need to post any bond or security, by any state or federal court in the State of Arizona having equity jurisdiction, and Executive agrees to be subject to the jurisdiction of such court and hereby waives any objection to the jurisdiction or venue thereof.

(d)Executive agrees that if the Company fails to take action to remedy any breach by Executive of this Agreement or any portion of the Agreement, such inaction by the Company shall not operate or be construed as a waiver of such breach or of any subsequent or other breach by Executive of the same or any other provision, agreement or covenant.

(e)The parties recognize that in order for Executive to perform duties on behalf of the Company, Executive needs to manage, use or otherwise have access to Confidential Information. Accordingly, the Company’s agreement to provide Executive with access to Confidential Information is subject to the terms and conditions of this Agreement, and Executive accepts all of the terms contained in Sections 5, 6, 7, 8 and 9 in exchange for being provided with such Confidential Information. Executive further acknowledges and agrees that his continued employment under the terms and with the payments and benefits to be provided to Executive under this Agreement constitute sufficient and adequate consideration for the covenants in Sections 5, 6, 7, 8, and 9 hereof.

(f)Executive’s obligations under Sections 5, 6, 7, 8 and 9 shall survive the termination of Executive’s employment in accordance with their terms and shall remain in effect despite any change in position, title, duties, compensation, or other terms and conditions of Executive’s employment. The existence of a claim by Executive against Company, whether predicated on this Agreement or otherwise, shall not relieve Executive of Executive’s obligations under Sections 5, 6, 7, 8 or 9 or render them unenforceable.

11.Representations and Warranties. Executive represents and warrants the following to the Company, each of which Executive acknowledges is a material inducement to the Company’s willingness to enter into this Agreement and a material provision of this Agreement:

(a)Other than as previously disclosed in writing or provided to the Company, Executive is not a party to or bound by any employment agreements, restrictive covenants,

_______

Executive’s Initials

non-compete restrictions, non-solicitation restrictions, and/or confidentiality or non-disclosure agreements with any other person, business or entity, or any agreement or contract requiring Executive to assign inventions to another party (each, a “Restrictive Agreement”), and Executive has conducted a thorough review of any and all agreements Executive may have entered into with any current or former employer or any other relevant party to ensure that this representation and warranty is correct.

(b)No Restrictive Agreement prohibits, restricts, limits or otherwise affects Executive’s employment with the Company as an executive or ability to perform any of Executive’s duties or responsibilities for the Company as contemplated herein.

(c)Executive has not made any material misrepresentation or omission in the course of his communications with the Company regarding the Restrictive Agreements or other obligations to any current or former employer or other third party.

(d)Executive has not, directly or indirectly, removed, downloaded, or copied any confidential or proprietary information or records of any current or former employer (or their subsidiaries and/or affiliates) without the express written consent of an authorized representative of such entity, and shall not use or possess, as of the date Executive begins employment and at all times during his employment with the Company, any confidential or proprietary information or records of any current or former employer (or their subsidiaries and/or affiliates), whether in hard copy or electronic form, including, but not limited to, documents, files, disks, or other materials, all of which Executive is prohibited from using in connection with his employment with the Company.

12.Survivorship. The respective rights and obligations of the parties under this Agreement, including but not limited to those rights and obligations set forth in Sections 5, 6, 7, 8, and 9, shall survive termination of Executive’s employment and any termination of this Agreement for any reason to the extent necessary to the intended preservation of such rights and obligations.

13.Notices. All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand-delivered or mailed by registered or certified mail, as follows (provided that notice of change of address shall be deemed given only when received):

If to the Company, to:

VM Consolidated, Inc.

1150 North Alma School Road

Mesa, AZ 85201

Attn: Chief Executive Officer

_______

Executive’s Initials

If to Executive, to:

The address of his principal residence most recently on file with the Company.

or to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section.

14.Contents of Agreement, Amendment, Interpretation and Assignment.

(a)This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any and all prior offer letters, employment agreements and understandings concerning Executive’s employment by the Company and cannot be changed or modified except upon written amendment approved by the Board and executed on its behalf by a duly authorized officer and by Executive.

(b)The headings in this Agreement are for convenience only, and both parties agree that they shall not be construed or interpreted to modify or affect the construction or interpretation of any provision of this Agreement.

(c)All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by Executive.

15.Severability. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated by a court of competent jurisdiction to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement that can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.

16.Remedies Cumulative; No Waiver. No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall operate or be construed

_______

Executive’s Initials

as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion.

17.Withholding. All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement other than such taxes that are, by their nature, obligations of the Company (for example, and without limitation, the employer portion of the Federal Insurance Contributions Act (FICA) taxes).

18.Counterparts. This Agreement may be executed in counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. Facsimile signatures and signatures transmitted by PDF shall be equivalent to original signatures.

19.Governing Law; Jurisdiction. This Agreement shall be governed by and interpreted under the laws of the State of Arizona without giving effect to (i) any conflicts-of-law provisions or choice of law provisions of the State of Arizona or of any other jurisdiction which provisions (if applied) would result in the application of the laws of any other jurisdiction other than of the State of Arizona, or (ii) canons of construction or principles of law that construe agreements against the draftsperson. Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court located in Arizona or the state courts of Maricopa County, Arizona, in respect of any claim, dispute, or controversy in any way arising out of or relating to this Agreement or Executive’s employment with the Company or the termination thereof, and each party hereby waives, and agrees not to assert as a defense in any action, suit or proceeding in which any such claim is made, that such party is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts. Any appellate proceedings shall take place in the appropriate courts having appellate jurisdiction over the courts set forth in this Section.

20.Section 409A. This Agreement is intended to comply with or otherwise be exempt from Section 409A and its corresponding regulations, to the extent applicable, and shall be so construed. Notwithstanding anything in this Agreement to the contrary, payments of “nonqualified deferred compensation” subject to Section 409A may only be made under this Agreement upon an event and in a manner permitted by Section 409A, to the extent applicable. For purposes of Section 409A, all payments of “nonqualified deferred compensation” subject to Section 409A to be made upon the termination of Executive’s employment under this Agreement may only be made upon a

_______

Executive’s Initials

“separation from service” under Section 409A. Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall Executive, directly or indirectly, designate the calendar year of payment with respect to any amount that is “nonqualified deferred compensation” subject to Section 409A. All reimbursements provided under this Agreement that are “nonqualified deferred compensation” that is subject to Section 409A shall be made or provided in accordance with Section 409A, including, where applicable, the requirements that (a) any reimbursement is for expenses incurred during the Employment Period (or during such other time period specified in this Agreement), (b) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (c) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (d) the right to reimbursement is not subject to liquidation or exchange for another benefit. Nothing herein shall be construed as having modified the time and form of payment of any amounts or payments of “nonqualified deferred compensation” within the meaning Section 409A that were otherwise payable pursuant to the terms of any agreement between Company and Executive in effect prior to the date of this Agreement.

21.Section 280G of the Code. Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or a Company affiliate to Executive or for Executive’s benefit pursuant to the terms of this Agreement or otherwise (the “Covered Payments”) constitute parachute payments (the “Parachute Payments”) within the meaning of Section 280G of the Code and, but for this Section 21, would be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under (i) above is less than the amount under (ii) above will the Covered Payments be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the “Reduced Amount”). “Net Benefit” shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes.

(a)Any such reduction shall be made in accordance with Section 409A and the following:

(i)the Covered Payments consisting of cash severance benefits that do not constitute nonqualified deferred compensation subject to Section 409A shall be reduced first, in reverse chronological order; and

(ii)all other Covered Payments consisting of cash payments, and Covered Payments consisting of accelerated vesting of equity based awards to which Treas. Reg. §1.280G-1

_______

Executive’s Initials

Q/A-24(c) does not apply, and that in either case do not constitute nonqualified deferred compensation subject to Section 409A, shall be reduced second, in reverse chronological order;

(iii)all Covered Payments consisting of cash payments that constitute nonqualified deferred compensation subject to Section 409A shall be reduced third, in reverse chronological order; and

(iv)all Covered Payments consisting of accelerated vesting of equity-based awards to which Treas. Reg. § 1.280G-1 Q/A-24(c) applies shall be the last Covered Payments to be reduced.

(b)Any determination required under this Section 21 shall be made in writing in good faith by an independent accounting firm selected by the Company and reasonably acceptable to the Executive (the “Accountants”). The Company and Executive shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 21. For purposes of making the calculations and determinations required by this Section 21, the Accountants may rely on reasonable, good-faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Accountants’ determinations shall be final and binding on the Company and Executive. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 21.

(c)It is possible that after the determinations and selections made pursuant to this Section 21 Executive will receive Covered Payments that are in the aggregate more than the amount intended or required to be provided after application of this Section 21 (“Overpayment”) or less than the amount intended or required to be provided after application of this Section 21 (“Underpayment”).

(i)In the event that: (A) the Accountants determine, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or Executive that the Accountants believe has a high probability of success, that an Overpayment has been made or (B) it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved that an Overpayment has been made, then Executive shall pay any such Overpayment to the Company together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date of Executive’s receipt of the Overpayment until the date of repayment.

(ii)In the event that: (A) the Accountants, based upon controlling precedent or substantial authority, determine that an Underpayment has occurred or (B) a court of competent jurisdiction determines that an Underpayment has occurred, any such Underpayment will be paid promptly by the Company to or for the benefit of Executive together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date the amount should have otherwise been paid to Executive until the payment date.

[Signature Page Follows.]

_______

Executive’s Initials

_______

Executive’s Initials

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.

VM CONSOLIDATED, INC.
By:	/s/ David Roberts
Name:	David Roberts
Title: Date:	Chief Executive Officer  November 8, 2022
/s/ Jon Keyser
JON KEYSER
November 7, 2022
Date:

EX-21

Exhibit 21.1

Subsidiaries of Verra Mobility Corporation

Entity	Jurisdiction of Formation
American Traffic Solutions Consolidated, L.L.C.	Delaware
American Traffic Solutions, Inc.	Kansas
American Traffic Solutions, L.L.C.	Delaware
ATS Processing Services, L.L.C.	Delaware
ATS Tolling LLC	Delaware
Auto Tag of America LLC	Delaware
Auto Titles of America LLC	Delaware
Canadian Highway Toll Administration Ltd.	British Columbia
Citation Collection Services, LLC	Indiana
Contractum Ltd	England & Wales
EPC Finance Limited	England & Wales
EPC Hungary Kft	Hungary
Euro Parking Collection PLC	England & Wales
Fourlev Limited	Israel
Greenlight Acquisition Corporation	Delaware
Greenlight Holding Corporation	Delaware
Greenlight Intermediate Holding Corporation	Delaware
Highway Toll Administration, LLC	New York
LaserCraft, Inc.	Georgia
Mulvihill ICS, Inc.	New York
Pagatelia, S.L.U.	Spain
PlatePass, L.L.C.	Delaware
Redflex Enforcement Services Pty Ltd	Victoria
Redflex Guardian, Inc.	Delaware
Redflex Holdings Pty Ltd	Victoria
Redflex Irish Investments Pty Ltd	Victoria
Redflex Pty Ltd	Victoria
Redflex Traffic Pty Ltd	Victoria
Redflex Traffic Systems (California), Inc.	California
Redflex Traffic Systems (Canada) Limited	British Columbia
Redflex Traffic Systems India Private Limited	India
Redflex Traffic Systems Limited	England & Wales
Redflex Traffic Systems Malaysia Sdn. Bhd.	Malaysia
Redflex Traffic Systems Pty Ltd	Victoria
Redflex Traffic Systems, Inc.	Delaware
Road Safety Operations Holdings Unlimited*	Ireland
RTS R&D Pty Ltd	Victoria
Sunshine State Tag Agency LLC	Delaware
T2 Holding Corp.	Delaware
T2 Systems Canada Inc.	British Columbia
T2 Systems Parent Corporation	Delaware
T2 Systems, Inc.	Indiana
Toll Buddy, LLC	Delaware

Traffic Operating Services (Saudi Arabia) LLC	Saudi Arabia
Transtoll Pty Ltd	Victoria
United Public Safety, Inc.	Pennsylvania
Verra Mobility B.V.	Netherlands
Verra Mobility Electrical Enterprises, Inc.	New York
Verra Mobility France SAS	France
Verra Mobility Holdings, LLC	Delaware
Verra Mobility Ireland Limited	Ireland
Violation Management Solutions, LLC	Delaware
VM Consolidated, Inc.	Delaware

* Where ownership of a subsidiary is less than 100% by Verra Mobility Corporation or a Verra Mobility Corporation subsidiary, such has been noted by an asterisk (*).

EX-23

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(1)Registration Statement (Form S-8 No. 333-230378) pertaining to the Verra Mobility Corporation 2018 Equity Incentive Plan;

(2)Registration Statement (Form S-1 No. 333-260822)

of our reports dated March 1, 2023, with respect to the consolidated financial statements and schedule of Verra Mobility Corporation, and the effectiveness of internal control over financial reporting of Verra Mobility Corporation, included in this Annual Report (Form 10-K) for the year ended December 31, 2022.

/s/ Ernst & Young LLP

Phoenix, Arizona

March 1, 2023

EX-31

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, David Roberts, certify that:

1.I have reviewed this Annual Report on Form 10-K of Verra Mobility Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: March 1, 2023	By:	/s/ David Roberts
		David Roberts
		President, Chief Executive Officer, and Director (Principal Executive Officer)

EX-31

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Craig Conti, certify that:

1.I have reviewed this Annual Report on Form 10-K of Verra Mobility Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: March 1, 2023	By:	/s/ Craig Conti
		Craig Conti
		Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David Roberts, President, Chief Executive Officer and Director of Verra Mobility Corporation, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)the Annual Report on Form 10-K of Verra Mobility Corporation for the year ended December 31, 2022 (“Annual Report”), as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of Verra Mobility Corporation.

Date: March 1, 2023	By:	/s/ David Roberts
		David Roberts
		President, Chief Executive Officer, and Director
		(Principal Executive Officer)

EX-32

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Craig Conti, Chief Financial Officer of Verra Mobility Corporation, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)the Annual Report on Form 10-K of Verra Mobility Corporation for the year ended December 31, 2022 (“Annual Report”), as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of Verra Mobility Corporation.

Date: March 1, 2023	By:	/s/ Craig Conti
		Craig Conti
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EX-99

Exhibit 99.1

 

Insider Trading Policy

VERRA MOBILITY

LEGAL & COMPLIANCE

POLICIES

 

Legal and Compliance Policies

Insider Trading Policy

Policy #	LC-004	Effective Date	2/16/2023	Control Family
Version	1.22	Policy Owner	Chief Legal Officer	Policy Approver	Chief Legal Officer

Table of Contents

Purpose and Overview		2
Part I		2
1.	Applicability	2
2.	General Policy: No Trading or Causing Trading while in Possession of Material Nonpublic Information	3
3.	Definitions	3
4.	Compliance Officer	5
5.	Only Designated Company Spokespersons Are Authorized to Disclose Material Nonpublic Information	6
6.	Employees Must Follow Company Guidelines Pertaining to Communications about the Company	6
7.	Other Transactions in Company Securities: Certain Exceptions to Policy	6
8.	Policy Violations Must Be Reported	6
9.	VRRM May Suspend All Trading Activities by Employees	7
10.	Violations of Insider Trading Laws or This Policy Can Result in Severe Consequences	7
11.	This Policy is Subject to Revision	7
12.	All Persons Must Acknowledge Their Agreement to Comply with This Policy	7
Part II		7
13.	Executive Officers, Directors and Certain Named Employees are Subject to Additional Restrictions	7
14.	Trading Window	8
15.	Trading Pre-Clearance Required	8
16.	Pre-Clearance of Rule 10b5-1 Plans Required	9
17.	Hardship Exemptions	9
18.	Brokers	9
19.	Reporting of Transactions Required	9

2023 Verra Mobility Page 1

Proprietary and Confidential

 

20.	Oversight by the Nominating and Corporate Governance Committee	10
21.	Named Employees Considered Insiders	10
22.	Special Guidelines for 10b5-1 Transactions	10
23.	Certain Types of Transactions Are Prohibited	13
Approval and Ownership		14
Revision History		14
Exhibit A – Section 16 Insiders		15
Exhibit B – Insider Employees		16
Exhibit C – Compliance Officers		19
Exhibit D – Form of Preclearance Request and Approval		20
Exhibit E – Form of Rule 10b5-1 Certification……………………………………………………………….21

Purpose and Overview

This Insider Trading Policy (“Policy”) describes the standards of Verra Mobility Corporation and its subsidiaries (“VRRM” or the “Company”) on trading, and causing the trading of, the Company’s securities or securities of certain other publicly traded companies while in possession of confidential information. This Policy is divided into two parts: Part I prohibits trading in certain circumstances and applies to all directors, officers and employees and their respective immediate family members of the Company, and Part II imposes special additional trading restrictions and applies to all (i) directors of the Company, (ii) executive officers of the Company and (iii) the employees listed on Exhibit B hereto (collectively, the “Insiders”).

Part I

1. Applicability

This Policy applies to all employees, outside directors, officers, and consultants of Verra Mobility Corporation and its subsidiaries (“VRRM” or the “Company”), their family members and entities over which such individuals have or share voting or investment control. This Policy also applies to any other person who receives material nonpublic information from any VRRM insider or is otherwise designated by a VRRM Compliance Officer. For purposes of this policy, “family members” include people who live with you, or are financially dependent on you, and also include those whose transactions in securities are directed by you or are subject to your influence or control.

This Policy continues to apply following termination of employment or other relationship with VRRM until after the first trading day that any material

2023 Verra Mobility Page 2

Proprietary and Confidential

 

non-public information in your possession has become public or is no longer material. Each employee, officer, consultant and director is personally responsible for the actions of their family members and other persons with whom they have a relationship who are subject to this policy, including any pre-clearances required.

2. General Policy: No Trading or Causing Trading while in Possession of Material Nonpublic Information

A. No person subject to this Policy may purchase or sell, or offer to purchase or sell, any Company security, whether or not issued by the Company, while in possession of material nonpublic information (as defined in Section 3 below) about the Company.

B. No person subject to this Policy who knows of any material nonpublic information about the Company may communicate that information to “tip” any other person, including family members and friends, or otherwise disclose such information without the Company’s authorization. Tipping includes passing information under circumstances that could suggest that you were trying to help another profit or avoid a loss. Exercise care when speaking with others who do not “need to know”, even if they are subject to this Policy, as well as when communicating with family, friends and others not associated with VRRM. To avoid the appearance of impropriety, refrain from discussing our business or prospects or making recommendations about buying or selling our securities or the securities of other companies with which we have a relationship. Inquiries about VRRM should be directed to our Investor Relations team.

C. No person subject to this Policy may purchase or sell any security of any other company, whether or not issued by the Company, while in possession of material nonpublic information about that company that was obtained in the course of his or her involvement with the Company. No person subject to this Policy who knows of any such material nonpublic information may communicate that information to, or tip, any other person, including family members and friends, or otherwise disclose such information without the Company’s authorization.

D. For compliance purposes, you should never trade, tip or recommend securities (or otherwise cause the purchase or sale of securities) while in possession of information that you have reason to believe is material and nonpublic unless you first consult with, and obtain the advance approval of, a Compliance Officer.

E. Insiders (as defined below) must “pre-clear” all trading in securities of the Company in accordance with the procedures set forth in Part II below.

3. Definitions

A. Material. Insider trading restrictions apply only if the information you possess is “material.” Materiality, however, involves a relatively low threshold. Information is generally regarded as “material” if it has market significance, that is, if its public dissemination is likely to affect the market price of securities, or if it otherwise is information that a reasonable investor would want to know before making an investment decision.

Information dealing with the following subjects is reasonably likely to be found material in particular situations:

i. significant changes in the Company’s prospects;

2023 Verra Mobility Page 3

Proprietary and Confidential

 

ii. significant write-downs in assets or increases in reserves;

iii. developments regarding significant litigation or government agency investigations;

iv. liquidity problems;

v. changes in earnings estimates or unusual gains or losses in major operations;

vi. major changes in the Company’s management or the board of directors;

vii. changes in dividends;

viii. extraordinary borrowings;

ix. major changes in accounting methods or policies;

x. award or loss of a significant contract;

xi. cybersecurity risks and incidents, including vulnerabilities and breaches;

xii. changes in debt ratings;

xiii. proposals, plans or agreements, even if preliminary in nature, involving mergers, acquisitions, divestitures, recapitalizations, strategic alliances, licensing arrangements, or purchases or sales of substantial assets; and

xiv. offerings of Company securities.

Material information is not limited to historical facts but may also include projections and forecasts. With respect to a future event, such as a merger, acquisition or introduction of a new product, the point at which negotiations or product development are determined to be material is determined by balancing the probability that the event will occur against the magnitude of the effect the event would have on a company's operations or stock price should it occur. Thus, information concerning an event that would have a large effect on stock price, such as a merger, may be material even if the possibility that the event will occur is relatively small. When in doubt about whether particular nonpublic information is material, you should presume it is material. If you are unsure whether information is material, you should either consult a Compliance Officer before making any decision to disclose such information (other than to persons who need to know it) or to trade in or recommend securities to which that information relates or assume that the information is material.

B. Nonpublic. Insider trading prohibitions apply only when you possess information that is material and “nonpublic.” The fact that information has been disclosed to a few members of the public does not make it public for insider trading purposes. To be “public” the information must have been disseminated in a manner designed to reach investors generally, and the investors must be given the opportunity to absorb the information. Even after public disclosure of information about the Company, you must wait until the close of business on the first trading day after the information was publicly disclosed before you can treat the information as public.

Nonpublic information may include:

2023 Verra Mobility Page 4

Proprietary and Confidential

 

i. information available to a select group of analysts or brokers or institutional investors;

ii. undisclosed facts that are the subject of rumors, even if the rumors are widely circulated; and

iii. information that has been entrusted to the Company on a confidential basis until a public announcement of the information has been made and enough time has elapsed for the market to respond to a public announcement of the information (normally two trading days).

As with questions of materiality, if you are not sure whether information is considered public, you should either consult with a Compliance Officer or assume that the information is nonpublic and treat it as confidential.

4. Compliance Officer

Compliance Officer. The Company has designated Insider Trading Compliance Officers on Exhibit C (each, a “Compliance Officer”). The Company will amend Exhibit C from time to time as necessary to reflect the addition and departure of one or more Compliance Officers. The duties of each Compliance Officer will include the following:

A. administering, monitoring and enforcing compliance with the Policy;

B. responding to all inquiries relating to this policy and its procedures;

C. designating and announcing special trading blackout periods during which no Insiders may trade in Company securities;

D. providing copies of this Policy and other appropriate materials to all current and new directors, officers and employees, and such other persons as a Compliance Officer determines have access to material nonpublic information concerning the Company;

E. administering, monitoring and enforcing compliance with federal and state insider trading laws and regulations;

F. assisting in the preparation and filing of all required SEC reports relating to trading in Company securities, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G;

G. maintaining as Company records originals or copies of all documents required by the provisions of this Policy or the procedures set forth herein, and copies of all required SEC reports relating to insider trading, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G;

H. revising the Policy as necessary to reflect changes in federal or state insider trading laws and regulations; and

I. maintaining the accuracy of the list of Section 16 Individuals as set forth on Exhibit A and the list of Insider Employees as set forth on Exhibit B, and updating such lists periodically as necessary to reflect additions or deletions.

Compliance Officers may designate one or more individuals who may perform the Compliance Officer’s duties in the event that a Compliance Officer is unable or unavailable to perform such duties. In fulfilling duties under this Policy, Compliance Officers shall be authorized to consult with VRRM outside counsel.

2023 Verra Mobility Page 5

Proprietary and Confidential

 

5. Only Designated Company Spokespersons Are Authorized to Disclose Material Nonpublic Information

U.S. federal securities laws prohibit the Company from selectively disclosing material nonpublic information. VRRM has established procedures for releasing material information in a manner that is designed to achieve broad dissemination of the information immediately upon its release. Employees may not, therefore, disclose material nonpublic information to anyone outside the Company, including family members and friends, other than in accordance with those established procedures. Any inquiries about the Company should be directed to our Investor Relations team.

6. Employees Must Follow Company Guidelines Pertaining to Communications about the Company

Employees must follow the VRRM Disclosure and Regulation FD Policy and the communication guidelines contained in the Employee Handbook when communicating about the Company, including via social media or other Internet posting.

7. Other Transactions in Company Securities: Certain Exceptions to Policy

A. General Rule. This Policy applies to all transactions in VRRM securities, including any securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s stock, whether or not issued by VRRM, such as exchange-traded options.

B. Employee Benefit Plans.

i. Equity Incentive Plans. The trading restrictions set forth in this Policy do not apply to the exercise of stock options or other equity awards for cash, but do apply to all sales of securities acquired through the exercise of stock options or other equity awards, including “same-day sale” or cashless exercise of Company stock options.

ii. Employee Stock Purchase Plans. The trading restrictions set forth in this Policy do not apply to purchases of Company securities pursuant to the employee’s advance instructions under employee stock purchase plans or employee benefit plans (e.g., a pension or 401(k) plan). However, no alteration to instructions regarding the level of withholding or the purchase of Company securities in such plans is permitted while in the possession of material nonpublic information. Any sale of securities acquired under such plans remains subject to the prohibitions and restrictions of this Policy.

8. Policy Violations Must Be Reported

Any person who violates this Policy, the Company’s Disclosure Policy or any federal or state laws governing insider trading, or knows of any such violation by any other person, must report the violation immediately to a Compliance Officer or the Audit Committee of VRRM Board of Directors, as the SEC can seek civil penalties against the Company, our directors and supervisory personnel for failing to take appropriate steps to prevent illegal trading. Upon learning of any such violation, a Compliance Officer or Audit Committee, in consultation with the Company’s legal counsel, will determine whether the Company should release any material nonpublic information or whether the Company should report the violation to the SEC or other appropriate governmental authority.

2023 Verra Mobility Page 6

Proprietary and Confidential

 

9. VRRM May Suspend All Trading Activities by Employees

In order to avoid any questions and to protect both employees and the Company from any potential liability, from time to time VRRM may impose a “blackout” period during which some or all employees may not buy or sell VRRM securities. A Compliance Officer will impose such a blackout period if, in his or her judgment, there exists nonpublic information that would make trades by VRRM employees (or certain employees) inappropriate in light of the risk that such trades could be viewed as violating applicable securities laws. If you are made aware of such a blackout period, do not disclose its existence to anyone.

10. Violations of Insider Trading Laws or This Policy Can Result in Severe Consequences

A. Civil and Criminal Penalties. The consequences of prohibited insider trading or tipping can be severe. Persons violating insider trading or tipping rules may be required to disgorge profit made or loss avoided, pay civil penalties up to three times the profit made or loss avoided, face private action for damages, as well as be subject to criminal penalties, including up to 20 years in prison and fines of up to $5 million. The Company and/or the supervisors of the person violating the rules may also be required to pay major civil or criminal penalties.

B. Company Discipline. Violation of this Policy or federal or state insider trading laws by any director, officer or employee may subject the director to removal proceedings and the officer or employee to disciplinary action by the Company, including termination for cause.

11. This Policy is Subject to Revision

VRRM may change the terms of this Policy from time to time to respond to developments in law and practice, and will take steps to inform all affected persons of any material changes.

12. All Persons Must Acknowledge Their Agreement to Comply with This Policy

The Policy will be available on the Company’s internal website, delivered to all persons subject to this Policy upon adoption, and to all new other persons at the start of their employment or relationship with the Company. Upon first receiving a copy of the Policy or any revised versions, each such person must sign an acknowledgment that he or she has received a copy and agrees to comply with the Policy’s terms. This acknowledgment and agreement will constitute consent for VRRM to impose sanctions for violation of this Policy and to issue any necessary stop-transfer orders to the Company’s transfer agent to enforce compliance with this Policy.

Part II

13. Executive Officers, Directors and Certain Named Employees are Subject to Additional Restrictions

A. Section 16 Insiders. The Company has designated those persons listed on Exhibit A (each a “Section 16 Insider”) as the directors and executive officers who are subject to the reporting provisions and trading restrictions of Section 16 of the Exchange Act and the underlying rules and regulations promulgated by the SEC. The Company will

2023 Verra Mobility Page 7

Proprietary and Confidential

 

amend Exhibit A from time to time as necessary to reflect the addition and the resignation or departure of Section 16 Insiders.

B. Insider Employees. VRRM has designated those persons listed on Exhibit B (“Insider Employees”) as employees who have frequent access to material nonpublic information concerning the Company. The Company will amend Exhibit B from time to time as necessary to reflect the addition and departure of Insider Employees.

C. Additional Restrictions. Because Section 16 Insiders and Insider Employees regularly possess material nonpublic information about the Company, and in light of the reporting requirements to which Section 16 Insiders are subject under Section 16 of the Exchange Act, Section 16 Insiders and Insider Employees are subject to the additional restrictions set forth in this Part II of the Policy. For purposes of this Policy, Section 16 Insiders and Insider Employees are each referred to as “Insiders.”

14. Trading Window

Any trade by an Insider that is subject to this Policy will be permitted only during an open “trading window.” Even when the window is open, all Company personnel are prohibited from trading in VRRM securities while in possession of material nonpublic information. The trading window generally opens following the close of trading on the first full trading day following the public issuance of the Company’s earnings release for the most recent fiscal quarter and closes at the close of trading fourteen (14) calendar days prior to the end of a fiscal quarter. In addition to when the trading window is scheduled to be closed, the Company may impose a special blackout period at its discretion due to the existence of material nonpublic information. A VRRM Compliance Officer will advise Insiders when the trading window opens and closes.

15. Trading Pre-Clearance Required

As part of this Policy, all purchases and sales of equity securities of the Company by Insiders, other than transactions that are not subject to the Policy or transactions pursuant to a Rule 10b5-1 trading plan authorized by a Compliance Officer, must be pre-cleared by a Compliance Officer. This requirement is intended to prevent inadvertent Policy violations, avoid trades involving the appearance of improper insider trading, facilitate timely Form 4 reporting by Section 16 Insiders and avoid transactions that are subject to disgorgement under Section 16(b) of the Exchange Act.

Requests for pre-clearance must be submitted on the form attached hereto as Exhibit D to a Compliance Officer at least two business days in advance of each proposed transaction. If the Insider does not receive a response from a Compliance Officer within 24 hours, the Insider must follow up to ensure that the message was received. Once the proposed transaction is pre-cleared, the Insider may proceed with it on the approved terms, provided that he or she complies with all other securities law requirements, such as Rule 144 and prohibitions regarding trading on the basis of inside information, and with any special trading blackout imposed by the Company prior to the completion of the trade.

16. Pre-Clearance of Rule 10b5-1 Plans Required

Pre-clearance is required for the establishment of a Rule 10b5-1 trading plan at least five full trading days prior to entry into or modification of the plan. However, pre-clearance

2023 Verra Mobility Page 8

Proprietary and Confidential

 

will not be required for individual transactions effected pursuant to a pre-cleared Rule 10b5-1 trading plan. All Section 16 Insiders must immediately report the results of transactions effected under a trading plan to a Compliance Officer since they will be reportable on Form 4 within two business days following the execution of the trade, subject to an extension of not more than two additional business days where the Section 16 Insider is not immediately aware of the execution of the trade. Notwithstanding the foregoing, any transactions by a Compliance Officer who is also an Insider shall be subject to pre-clearance by another Compliance Officer, the Chief Financial Officer or, in the event of their unavailability, the Chief Executive Officer.

17. Hardship Exemptions

Compliance Officers may, on a case-by-case basis, authorize a transaction in VRRM securities outside of the trading window (but in no event during a special blackout period) due to financial or other hardship. Any request for a hardship exemption must be in writing and must describe the amount and nature of the proposed transaction and the circumstances of the hardship. The Insider requesting the hardship exemption must also certify to a Compliance Officer within two business days prior to the date of the proposed trade that he or she is not in possession of material nonpublic information concerning VRRM. The existence of the foregoing procedure does not in any way obligate a Compliance Officer to approve any hardship exemption requested by an Insider.

18. Brokers

All Insiders must ensure that their broker does not to execute any transaction for the Insider (other than under a previously authorized Rule 10b5-1 trading plan) until the broker has verified with a Compliance Officer that the transaction has been precleared.

19. Reporting of Transactions Required

To facilitate timely reporting under Section 16 of the Exchange Act, Section 16 Insiders are required to on the same day as the trade date, or, with respect to transactions effected pursuant to a Rule 10b5-1 plan, on the day the Insider is advised of the terms of the transaction, (a) report the details of each transaction to a Compliance Officer and (b) arrange with persons whose trades must be reported by the Insider under Section 16 (such as immediate family members living in the Insider’s household) to immediately report directly to the Company and to the Insider the following transaction details:

 Transaction date (trade date).

 Number of shares involved.

 Price per share at which the transaction was executed (before addition or deduction of brokerage commission and other transaction fees).

 For stock option exercises, the specific option exercised.

 Contact information for the broker who executed the transaction.

The transaction details must be reported to a Compliance Officer, with copies to VRRM personnel who will assist the Section 16 Insider in preparing his or her Form 4.

2023 Verra Mobility Page 9

Proprietary and Confidential

 

20. Oversight by the Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee (the “Committee”) of the Board of Directors will be responsible for monitoring and recommending any modification to this Policy, if necessary or advisable, to the Board of Directors. The Committee will also review, at least annually, those individuals who are deemed to be executive officers for purposes of Section 16 and will recommend any changes regarding such status to the Board of Directors.

21. Named Employees Considered Insiders

The Committee will review, at least annually, those individuals deemed to be “Insiders” for purposes of this Part II. Insiders shall include persons subject to Section 16 and such other persons as the Committee deems to be Insiders. Generally, Insiders shall be any person who by function of their employment is consistently in possession of material nonpublic information or performs an operational role, such as head of a division or business unit, that is material to the Company as a whole.

22. Special Guidelines for 10b5-1 Transactions

Notwithstanding the foregoing, an Insider will not be deemed to have violated this Policy for transactions that meet all of the enumerated criteria below:

A. Plan Requirements and Cooling-Off Periods. The transaction must be made pursuant to a documented plan (the “Plan”) entered into in good faith that complies with all provisions of Rule 10b5‑1 (the “Rule”), including, without limitation:

i. Each Plan adopted by a Section 16 Insider must provide that trading under the plan cannot begin until the later of: (a) ninety days after the adoption of the Plan; or (b) two business days following the disclosure of the Company’s financial results in a Form 10-Q or 10-K for the fiscal quarter in which the plan was adopted (subject to a maximum of 120 days after adoption of the Plan).

ii. Each Plan adopted by a Section 16 Insider must include a representation in such Plan certifying, at the time of adoption, that the adopting Section 16 Insider: (a) is not aware of material non-public information about the Company or its securities; and (b) is adopting the plan in good faith and not as part of a plan or scheme to evade the prohibitions of the Rule.

iii. Each Plan adopted by a person other than a Section 16 Insider must provide that trading under the plan cannot begin until the later of: (a) thirty days after the adoption of the Plan; or (b) two business days following the disclosure of the Company’s financial results in a Form 10-Q or 10-K for the fiscal quarter in which the plan was adopted.

iv. Each Plan must:

a. specify the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold, or include a written formula or algorithm, or computer program, for determining the amount of securities to be purchased or sold and the price at which and the date on which the securities were to be purchased or sold;

2023 Verra Mobility Page 10

Proprietary and Confidential

 

b. prohibit the Insider and any other person who possesses material nonpublic information from exercising any subsequent influence over how, when, or whether to effect purchases or sales;

c. provide appropriate mechanisms to ensure that the Insider complies with all rules and regulations, including Rule 144, Rule 701 and Section 16(b), applicable to securities transactions under the Plan by the Insider; and

d. provide for the suspension of all transactions under such Plan in the event that the Company, in its sole discretion, deems such suspension necessary and advisable, including suspensions necessary to comply with trading restrictions imposed in connection with any lock-up agreement required in connection with a securities issuance transaction or other similar events.

B. Authorization by Compliance Officer. Each Plan must be authorized prior to the effective time of any transactions under such Plan by the Company’s Compliance Officer. The Company reserves the right to withhold authorization of any Plan that a Compliance Officer determines, in his or her sole discretion,

i. fails to comply with the Rule, or

ii. would permit a transaction to occur before the cooling off periods set forth in Section 22A, or

iii. is established during a “closed” window period or a special “blackout” period, or the Insider is unable to represent to the satisfaction of the Compliance Officer that the Insider is not in possession of material nonpublic information regarding the Company, or

iv. lacks appropriate mechanisms to ensure that the Insider complies with all rules and regulations, including Rule 144, Rule 701, Form S-8, and Section 16 of the Exchange Act, applicable to securities transactions by the Insider, or

v. does not provide the Company the right to suspend all transactions under the Plan if the Compliance Officer, in his or her sole discretion, deems such suspension necessary or advisable, including suspensions to comply with any “lock-up” agreement the Company agrees to in connection with a financing or other similar events, or

vi. exposes the Company or the Insider to liability under any other applicable state or federal rule, regulation or law, or

vii. creates any appearance of impropriety, or

viii. fails to meet the guidelines established by the Company, or

ix. otherwise fails to satisfy review by the Compliance Officer for any reason, in the sole discretion of the Compliance Officer.

C. Timing for Establishing New Plan. Each Plan must be established at a time when the trading window is open, and the person is not in possession of material nonpublic information.

D. Special Certification for Section 16 Insiders. Prior to adopting a Plan, any Section 16 Insider must submit the certification on the from attached hereto as Exhibit E to the

2023 Verra Mobility Page 11

Proprietary and Confidential

 

Company’s Compliance Officer at least two business days in advance of adopting such Plan.

E. Limitations on Single-Trade and Overlapping Plans. No Insider may (i) adopt a new Plan, or (ii) enter into a single trade plan (i.e., a plan to affect the purchase or sale of the total amount of securities in a single transaction where the agent’s future trades do not depend on events or data unknown at the time the plan is entered into), if such Insider already has another Plan outstanding (each, a “Pre-Existing Trading Plan”); provided, however, that the Insiders may transact directly with the Company while there is a Pre-Existing Trading Plan (the “Prohibition on Overlapping Trading Plans”). Below is a list of exceptions to the Prohibition on Overlapping Trading Plans:

i. Trades with Different Broker-Dealers under a Single “Plan”: Insiders may use multiple brokers, through a series of separate contracts with different broker-dealers or agents acting on behalf of the Insider (other than the Company), to execute trades under a single Plan that covers securities held in different accounts, if each contract, when taken together as a whole, meets all of the requirements of the Rule. Any modification of one plan, contract or arrangement will be treated as a modification of the other contracts that are part of the single Plan.

ii. Consecutive 10b5-1 Plans: An Insider may maintain two separate Plans at the same time if trading under the later-commencing Plan is not authorized to begin until after all trades under the Pre-Existing Trading Plan are completed or expired. This exception is not available if the first trade under the later Plan is scheduled to occur during the “cooling off period” described in Section 22A applicable to the later Plan had it been adopted on the date the Pre-Existing Trading Plan terminated.

iii. “Sell-to-Cover” Transactions: Insiders may have a second Plan in addition to the Pre-Existing Trading Plan if the Plan only authorizes qualified sell-to-cover transactions that instruct the Insider’s agents to sell securities in order to satisfy tax withholding obligations at the time an award vests.

F. Modifications to a Plan.

a. Any modifications to the Plan or deviations from the Plan without prior authorization of a Compliance Officer is a violation of this Policy. Any such modifications or deviations are subject to the authorization of a Compliance Officer in accordance with Section B above.

b. Upon entering into or amending a Plan, the director or officer must promptly provide a copy of the plan to the Company and, upon request, confirm the Company’s planned disclosure regarding the entry into or termination of a plan (including the date of adoption or termination of the plan, duration of the plan, and aggregate number of securities to be sold or purchased under the plan)

G. Termination of a Plan. Any termination of a Plan must be immediately reported to the Compliance Officer. If an Insider has pre-cleared a new Plan (the “Second Plan”) intended to succeed an earlier pre-cleared Plan (the “First Plan”), the Insider may

2023 Verra Mobility Page 12

Proprietary and Confidential

 

not affirmatively terminate the First Plan without pre-clearance pursuant to Section C above, because such termination is deemed to be entering into the Second Plan.

H. No Liability. None of the Company, Compliance Officers, nor any of the Company’s officers, employees or other representatives shall be deemed, solely by their authorization of an Insider’s Plan, to have represented that any Plan complies with the Rule or to have assumed any liability or responsibility to the Insider or any other party if such Plan fails to comply with the Rule.

23. Certain Types of Transactions Are Prohibited

A. Short Sales. Short sales of VRRM securities are prohibited, as short sales evidence the seller’s expectation that VRRM securities will decline in value, signal to the market that the seller has no confidence in the Company or its short-term prospects, and may reduce the seller’s incentive to improve VRRM performance. In addition, Section 16(c) of the Securities Exchange Act of 1934 (the “Exchange Act”) prohibits executive officers and directors from engaging in short sales.

B. Publicly Traded Options. Transactions in puts, calls or other derivative securities involving VRRM stock are prohibited, as such transaction is, in effect, a bet on the short-term movement of the Company’s stock, creates the appearance of trading based on inside information, and may focus attention on short-term performance at the expense of VRRM long-term objectives.

C. Hedging Transactions. Hedging or monetization transactions (including but not limited to zero-cost collars, prepaid variable forwards, equity swaps, puts, calls, collars, forwards and other derivative instruments) are prohibited, as such transactions allow you to continue to own VRRM securities without the full risks and rewards of ownership and as a result, you may not have the same objectives as other stockholders.

D. Margin Accounts and Pledges. Directors, officers and other employees are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan, as such securities may be traded without your consent (for failing to meet a margin call or if you default on the loan) at a time when you possess material nonpublic information or otherwise are not permitted to trade.

E. Short-Term Trading. Executive officers and directors who purchase VRRM securities in the open market may not sell any VRRM securities of the same class during the six months following the purchase (or vice versa), as short-term trading of the Company’s securities may be distracting and may unduly focus the person on short-term stock market performance, instead of VRRM long-term business objectives, and may result in the disgorgement of any short swing profits.

2023 Verra Mobility Page 13

Proprietary and Confidential

XML

Document and Entity Information - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2022

Feb. 24, 2023

Jun. 30, 2022

Cover [Abstract]

Entity Registrant Name

VERRA MOBILITY CORPORATION

Entity Central Index Key

0001682745

Document Type

10-K

Document Period End Date

Dec. 31, 2022

Amendment Flag

false

Current Fiscal Year End Date

--12-31

Entity Filer Category

Large Accelerated Filer

Entity Current Reporting Status

Yes

Entity File Number

001-37979

Entity Tax Identification Number

81-3563824

Entity Address, Address Line One

1150 North Alma School Road

Entity Address, City or Town

Mesa

Entity Address, State or Province

AZ

Entity Address, Postal Zip Code

85201

City Area Code

480

Local Phone Number

443-7000

Entity Shell Company

false

Entity Small Business

false

Entity Emerging Growth Company

false

Document Fiscal Year Focus

2022

Document Fiscal Period Focus

FY

Trading Symbol

VRRM

Entity Common Stock, Shares Outstanding

148,981,250

Entity Interactive Data Current

Yes

Title of 12(b) Security

Class A Common Stock, par value $0.0001 per share

Security Exchange Name

NASDAQ

Entity Incorporation, State or Country Code

DE

Document Annual Report

true

Document Transition Report

false

Entity Voluntary Filers

No

Entity Well Known Seasoned Issuer

Yes

Entity Public Float

$ 2,395,635,197

ICFR Auditor Attestation Flag

true

Documents Incorporated by Reference

Portions of the registrant’s proxy statement to be filed in connection with its annual meeting of stockholders to be held May 23, 2023 are incorporated by reference into Part III of this Form 10-K.

Auditor Name

Ernst & Young LLP

Auditor Location

Phoenix, Arizona

Auditor Firm ID

42

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 105,204	$ 101,283
Restricted cash	3,911	3,149
Accounts receivable (net of allowance for credit losses of $15.9 million and $12.1 million at December 31, 2022 and 2021, respectively)	163,786	160,979
Unbilled receivables	30,782	29,109
Inventory	19,307	12,093
Prepaid expenses and other current assets	39,604	41,456
Total current assets	362,594	348,069
Installation and service parts, net	22,923	13,332
Property and equipment, net	109,775	96,066
Operating lease assets	37,593	38,862
Intangible assets, net	377,420	487,299
Goodwill	833,480	838,867
Other non-current assets	12,484	14,561
Total assets	1,756,269	1,837,056
Current liabilities:
Accounts payable	79,869	67,556
Deferred revenue	31,164	27,141
Accrued liabilities	48,847	38,435
Tax receivable agreement liability, current portion	4,994	5,107
Current portion of long-term debt	21,935	36,952
Total current liabilities	186,809	175,191
Long-term debt, net of current portion	1,190,045	1,206,802
Operating lease liabilities, net of current portion	33,362	34,984
Tax Receivable Agreement Liability Net of Current Portion	50,900	56,615
Private placement warrant liabilities	24,066	38,466
Asset retirement obligation	12,993	11,824
Deferred tax liabilities, net	21,149	47,524
Other long-term liabilities	5,875	5,686
Total liabilities	1,525,199	1,577,092
Commitments and contingencies (Note 17)
Stockholders' equity
Preferred stock, $0.0001 par value, 1,000 shares authorized with no shares issued and outstanding at December 31, 2022 and 2021
Common stock, $0.0001 par value, 260,000 shares authorized with 148,962 and 156,079 shares issued and outstanding at December 31, 2022 and 2021, respectively	15	16
Common stock contingent consideration	36,575	36,575
Additional paid-in capital	305,423	309,883
Accumulated deficit	(98,078)	(81,416)
Accumulated other comprehensive loss	(12,865)	(5,094)
Total stockholders' equity	231,070	259,964
Total liabilities and stockholders' equity	$ 1,756,269	$ 1,837,056

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for credit losses	$ 15,907	$ 12,138
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	260,000,000	260,000,000
Common stock, shares issued	148,962,000	156,079,000
Common stock, shares outstanding	148,962,000	156,079,000

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Total revenue	$ 741,598	$ 550,590	$ 393,593
Operating expenses	226,324	163,370	115,729
Selling, general and administrative expenses	163,133	123,407	89,664
Depreciation, amortization and (gain) loss on disposal of assets, net	140,174	116,801	116,844
Total costs and expenses	576,893	438,724	355,777
Income from operations	164,705	111,866	37,816
Interest expense, net	69,372	44,942	40,865
Change in fair value of private placement warrants	(14,400)	7,600	1,133
Tax receivable agreement liability adjustment	(720)	(1,016)	6,850
Gain on interest rate swap	(996)	0	0
Gain on extinguishment of debt	(3,005)	5,334	0
Other income, net	(12,654)	(12,895)	(11,885)
Total other expenses	37,597	43,965	36,963
Income before income taxes	127,108	67,901	853
Income tax provision	34,633	26,452	5,431
Net income (loss)	92,475	41,449	(4,578)
Other comprehensive (loss) income:
Change in foreign currency translation adjustment	(7,771)	(5,305)	2,788
Total comprehensive income (loss)	$ 84,704	$ 36,144	$ (1,790)
Net income (loss) per share:
Basic	$ 0.61	$ 0.26	$ (0.03)
Diluted	$ 0.50	$ 0.25	$ (0.03)
Weighted average shares outstanding:
Basic	152,848	159,983	161,632
Diluted	159,026	163,778	161,632
Service Revenue
Total revenue	$ 695,218	$ 492,846	$ 336,274
Cost of revenue	16,330	5,337	3,967
Product Sales
Total revenue	46,380	57,744	57,319
Cost of revenue	$ 30,932	$ 29,809	$ 29,573

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Common Stock Platinum Stockholder	Common Stock Contingent Consideration	Common Stock Contingent Consideration Platinum Stockholder	Additional Paid-in Capital	Additional Paid-in Capital Platinum Stockholder	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2019	$ 309,614		$ 16		$ 54,862		$ 346,891		$ (89,578)		$ (2,577)
Beginning Balance (in shares) at Dec. 31, 2019			159,150,000
Net income (loss)	(4,578)								(4,578)
Stock issued in exchange for business acquisitions						$ (18,287)		$ 18,287
Stock issued in exchange for business acquisitions (in shares)				2,500,000
Vesting of restricted stock units ("RSUs") (in shares)			619,000
Payment of employee tax withholding related to RSUs vesting	(4,147)						(4,147)
Stock-based compensation	12,589						12,589
Other comprehensive income (loss), net of tax	2,788										2,788
Ending Balance at Dec. 31, 2020	315,572		$ 16		36,575		373,620		(94,850)		211
Ending Balance (Accounting Standards Update 2016-13) at Dec. 31, 2020		$ (694)								$ (694)
Ending Balance (in shares) at Dec. 31, 2020			162,269,000
Net income (loss)	41,449								41,449
Share repurchase and retirement	(100,000)						(71,985)		(28,015)
Share repurchase and retirement (in shares)			(6,849,000)
Vesting of restricted stock units ("RSUs") (in shares)			647,000
Exercise of stock options	155						155
Exercise of stock options (in shares)			12,000
Payment of employee tax withholding related to RSUs vesting	(5,691)						(5,691)
Stock-based compensation	13,784						13,784
Other comprehensive income (loss), net of tax	(5,305)										(5,305)
Ending Balance at Dec. 31, 2021	259,964		$ 16		36,575		309,883		(81,416)		(5,094)
Ending Balance (in shares) at Dec. 31, 2021			156,079,000
Net income (loss)	92,475								92,475
Share repurchase and retirement	(125,071)		$ (1)				(15,933)		(109,137)
Share repurchase and retirement (in shares)			(7,874,000)
Vesting of restricted stock units ("RSUs") (in shares)			654,000
Exercise of stock options	1,334						1,334
Exercise of stock options (in shares)			103,000
Payment of employee tax withholding related to RSUs vesting	(6,524)						(6,524)
Stock-based compensation	16,663						16,663
Other comprehensive income (loss), net of tax	(7,771)										(7,771)
Ending Balance at Dec. 31, 2022	$ 231,070		$ 15		$ 36,575		$ 305,423		$ (98,078)		$ (12,865)
Ending Balance (in shares) at Dec. 31, 2022			148,962,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash Flows from Operating Activities:
Net income (loss)		$ 92,475	$ 41,449	$ (4,578)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		138,684	116,753	116,570
Amortization of deferred financing costs and discounts		5,472	5,170	5,437
Change in fair value of private placement warrants		(14,400)	7,600	1,133
Tax receivable agreement liability adjustment		(720)	(1,016)	6,850
Gain on interest rate swap		(996)
Gain on extinguishment of debt		(3,005)	5,334
Credit loss expense (income)		14,481	9,588	14,391
Deferred income taxes		(17,355)	(10,640)	(4,746)
Stock-based compensation		16,663	13,784	12,589
Impairment on a privately-held equity investment		1,340	0
Other		1,654	308	1,210
Changes in operating assets and liabilities:
Accounts receivable		(17,685)	14,946	(90,592)
Unbilled receivables		(1,936)	(7,753)	5,964
Inventories		(10,310)	2,798
Prepaid expenses and other assets		4,306	(5,097)	3,829
Deferred revenue		4,591	(3,966)	58
Accounts payable and other current liabilities		6,513	8,296	(16,925)
Other liabilities		(1,435)	(4,383)	(4,281)
Net cash provided by operating activities		218,337	193,171	46,909
Cash Flows from Investing Activities:
Acquisitions, net of cash and restricted cash acquired			(451,237)
Payment of contingent consideration		(647)
Purchases of installation and service parts and property and equipment		(48,186)	(24,998)	(24,260)
Cash proceeds from the sale of assets		241	265	107
Net cash used in investing activities		(48,592)	(475,970)	(24,153)
Cash Flows from Financing Activities:
Borrowings on revolver			25,000
Repayment on revolver		(25,000)
Borrowings of long-term debt			1,245,500
Repayment of long-term debt		(9,019)	(884,530)	(28,779)
Payment of debt issuance costs		(447)	(10,646)	(1,078)
Payment of debt extinguishment costs			(1,066)
Share repurchase and retirement		(125,071)	(100,000)
Proceeds from exercise of stock options		1,334	155
Payment of employee tax withholding related to RSUs vesting		(6,524)	(5,691)	(4,147)
Payment of contingent consideration		(205)
Net cash used in financing activities		(164,932)	268,722	(34,004)
Effect of exchange rate changes on cash and cash equivalents		(130)	(2,383)	(290)
Net (decrease) increase in cash, cash equivalents and restricted cash		4,683	(16,460)	(11,538)
Cash, cash equivalents and restricted cash - beginning of period		104,432	120,892	132,430
Cash, cash equivalents and restricted cash - end of period		109,115	104,432	120,892
Supplemental cash flow information:
Interest paid		63,663	35,786	35,822
Income taxes paid, net of refunds		47,623	35,774	12,638
Supplemental non-cash investing and financing activities:
Earn-out shares issued to Platinum Stockholder				18,287
Additions related to asset retirement obligations, property and equipment, and other	[1]	946	1,397	133
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		$ 10,421	1,714	$ 1,289
Contingent consideration related to NuPark acquisition			$ 1,450

[1] (a) Asset retirement obligations of $3.9 million assumed as part of the Redflex acquisition in 2021 are excluded from these additions.

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021
Asset retirement obligations	[1]	$ 944	$ 5,210
Redflex Holdings Limited
Asset retirement obligations			$ 3,900

[1] For the year ended December 31, 2022, this includes approximately $0.4 million increase resulting from a change in estimate for the impact of inflation. For the year ended December 31, 2021, this includes $3.9 million of asset retirement obligations assumed as part of the Redflex acquisition in 2021, and a $1.2 million increase resulting from a change in estimate for the impact of inflation.

XML

Description of Business

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

1.Description of Business

Verra Mobility Corporation (collectively with its subsidiaries, the “Company” or “Verra Mobility”), formerly known as Gores Holdings II, Inc. (“Gores”), was originally incorporated in Delaware on August 15, 2016, as a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses. On January 19, 2017, the Company consummated its initial public offering (the “IPO”), following which its shares began trading on the Nasdaq Capital Market (“Nasdaq”). On June 21, 2018, Gores entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Greenlight Holding II Corporation (“Greenlight”), PE Greenlight Holdings, LLC (the “Platinum Stockholder”), AM Merger Sub I, Inc., a direct, wholly owned subsidiary of Gores and AM Merger Sub II, LLC, a direct, wholly owned subsidiary of Gores. On October 17, 2018, the transactions contemplated by the Merger Agreement (the “Business Combination”) were consummated. In connection with the closing of the Business Combination, Gores changed its name to Verra Mobility Corporation. As a result of the Business Combination, Verra Mobility Corporation became the owner, directly or indirectly, of all of the equity interests of Verra Mobility Holdings, LLC and its subsidiaries.

Verra Mobility offers integrated technology solutions and services to its customers who are located throughout the world, primarily within the United States, Australia, Canada and Europe. The Company is organized into three operating segments: Commercial Services, Government Solutions and Parking Solutions (see Note 18. Segment Reporting).

The Commercial Services segment offers toll and violation management solutions for the commercial fleet and rental car industries by partnering with the leading fleet management and rental car companies in North America. Electronic toll payment services enable fleet drivers and rental car customers to use high-speed cashless toll lanes or all-electronic cashless toll roads. The service helps commercial fleets reduce toll management costs, while it provides rental car companies with a revenue-generating, value-added service for their customers. Electronic violation processing services reduce the cost and risk associated with vehicle-issued violations, such as toll, parking or camera-enforced tickets. Title and registration services offer title and registration processing for individuals, rental car companies and fleet management companies. In Europe, the Company provides violations processing through Euro Parking Collection plc and consumer tolling services through Pagatelia S.L.U.

The Government Solutions segment offers photo enforcement solutions and services to its customers. Through its acquisition of Redflex Holdings Limited (“Redflex”) in June 2021, the Company expanded its current footprint in the United States and gained access to international markets (see Note 3. Acquisitions). The Government Solutions segment provides complete, end-to-end speed, red-light, school bus stop arm and bus lane enforcement solutions within the United States and Canada. These programs are designed to reduce traffic violations and resulting collisions, injuries, and fatalities. The Company implements and administers traffic safety programs for municipalities, counties, school districts and law enforcement agencies of all sizes. The international operations acquired through Redflex primarily involve the sale or license of traffic enforcement products and related maintenance services.

The Parking Solutions segment offers an integrated suite of parking software and hardware solutions to its customers which include universities, municipalities, parking operators, healthcare facilities and transportation hubs. The Company added this operating segment as a result of the acquisition of T2 Systems Parent Corporation (“T2 Systems”) in December 2021, which allows the Company to diversify its operations into the parking solutions space (see Note 3. Acquisitions). The Parking Solutions segment develops specialized hardware and parking management software that provides a platform for the issuance of parking permits, enforcement, gateless vehicle counting, event parking and citation services. T2 Systems also produces and markets its proprietary software as a service to its customers throughout the United States and Canada.

XML

Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Significant Accounting Policies

2.Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All

intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions include those related to the fair values assigned to net assets acquired (including identifiable intangibles) in business combinations, allocating the transaction price for revenue recognition, inventory valuation, allowance for credit losses, fair value of the private placement warrant liabilities, fair value of the interest rate swap, self insurance liability, valuation allowance on deferred tax assets, uncertain tax positions, apportionment for state income taxes, the tax receivable agreement liability, fair value of privately-held securities, impairment assessments of goodwill, intangible assets and other long-lived assets, asset retirement obligations, contingent consideration and the recognition and measurement of loss contingencies.

Management believes that its estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less when acquired to be cash equivalents.

Restricted Cash

The Company collects cash on behalf of customers under certain contracts which it deposits daily into Company bank accounts and transfers regularly to customer bank accounts. Restricted cash represents customer cash collected but not yet remitted to the customer. Restricted cash is classified as a current asset and the corresponding liability is classified in current liabilities.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, accounts receivable and unbilled receivables. The Company limits cash and cash equivalents to highly rated financial institutions.

Significant customers are those which represent more than 10% of the Company’s total revenue or accounts receivable, net. Revenue from the single Government Solutions customer exceeding 10% of total revenue is presented below:

	For the Year Ended December 31,
	2022			2021			2020
City of New York Department of Transportation		19.5	%		26.6	%		31.3	%

The City of New York Department of Transportation (“NYCDOT”) represented 22% and 39% of total accounts receivable, net as of December 31, 2022 and 2021, respectively. There is no material reserve related to NYCDOT open receivables as amounts are deemed collectible based on current conditions and expectations. No other Government Solutions customer exceeded 10% of total accounts receivable, net as of any period presented.

Significant customer revenue concentrations generated through the Company’s Commercial Services partners as a percent of total revenue are presented below:

	For the Year Ended December 31,
	2022			2021			2020
Hertz Corporation		11.1	%		12.6	%		12.0	%
Avis Budget Group, Inc.		13.0	%		12.3	%		9.5	%
Enterprise Holdings, Inc.		9.3	%		11.4	%		11.3	%

The Avis Budget Group, Inc. was 10.2% of total accounts receivable, net as of December 31, 2022. No other Commercial Services customer exceeded 10% of total accounts receivable, net as of any period presented.

There were no significant customer concentrations that exceeded 10% of total revenue or accounts receivables, net for the Parking Solutions segment.

Allowance for Credit Losses

Accounts receivable and unbilled receivables are uncollateralized customer obligations arising from the sale of products or services. Accounts receivable and unbilled receivables have normal trade terms of less than one year and are initially stated at the amounts billed to the customers and subsequently measured at amortized cost net of allowance for credit losses. Unbilled receivables are recorded when revenues have been earned but have not been included on a customer invoice through the end of the current period.

The Company reviews historical credit losses and customer payment trends on receivables and develops loss rate estimates as of the balance sheet date, which includes adjustments for current and future expectations using probability-weighted assumptions about potential outcomes. Receivables are written off against the allowance for credit losses when it is probable that amounts will not be collected based on the terms of the customer contracts, and subsequent recoveries reverse the previous write-off and apply to the receivable in the period recovered. No interest or late fees are charged on delinquent accounts. The Company evaluates the adequacy of its allowance for expected credit losses by comparing its actual write-offs to its previously recorded estimates and adjusts appropriately.

The Company identified portfolio segments based on the type of business, industry in which the customer operates and historical credit loss patterns. The following presents the activity in the allowance for credit losses for the years ended December 31, 2021 and 2022, respectively:

($ in thousands)	Commercial Services (Driver-billed) (1)			Commercial Services (All other)			Government Solutions			Parking Solutions			Total
Balance at January 1, 2021	$	3,210		$	4,277		$	3,984		$	—		$	11,471
Credit loss expense (income)		11,040			(1,138	)		(314	)		—			9,588
Write-offs, net of recoveries		(8,853	)		(47	)		(21	)		—			(8,921	)
Balance at December 31, 2021	$	5,397		$	3,092		$	3,649		$	—		$	12,138
Credit loss expense		11,739			1,307			950		485				14,481
Write-offs, net of recoveries		(7,536	)		(2,822	)		(26	)		(328	)		(10,712	)
Balance at December 31, 2022	$	9,600		$	1,577		$	4,573		$	157		$	15,907

(1)Driver-billed consists of receivables from drivers of rental cars and fleet management companies for which the Company bills on behalf of its customers. Receivables not collected from drivers within a defined number of days are transferred to customers subject to applicable bad debt sharing agreements.

The Commercial Services (Driver-billed) portfolio segment’s credit loss estimate as of December 31, 2021 and 2022 increased compared to the prior years due to increased revenue that impacted the volume of transactions as a result of recovery from COVID-19. The Company adjusted down its estimate for credit loss as of December 31, 2021 for the Commercial Services (All other) portfolio segment to reflect improved economic conditions based on customer payment trends from the preceding twelve months. The credit loss estimate for this portfolio segment decreased as of December 31, 2022 mainly due to a $1.7 million write-off for a rental car customer who filed for bankruptcy.

Inventory

Inventories consist of parts and electronic components used in the production of parking management related hardware sold to certain Parking Solutions customers and photo enforcement equipment sold to certain Government Solutions customers. Inventories are stated at cost on a first-in, first-out basis or net realizable value. The Company assesses the value of its inventory and writes down the cost to net realizable value upon evaluation of historical experience and assumptions regarding future usage, and any such write down establishes a new cost basis for the items. Finished goods were approximately $5.1 million and $2.5 million as of December 31, 2022 and 2021, respectively.

Installation and Service Parts

Installation and service parts consist of components used in the construction and maintenance of our photo enforcement systems. Installation and service parts are stated at cost and are reclassified to property and equipment upon initiation of construction. Installation and service parts used in repairs and maintenance are recorded as operating expenses.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. All repairs and maintenance costs are expensed as incurred. Depreciation is recorded on a straight-line basis over the estimated useful lives of the related assets as follows:

Equipment installed at customer sites	3-7 years
Computer equipment	3-5 years
Furniture	3-10 years
Automobiles	3-7 years
Software	3-7 years
Leasehold improvements	Shorter of lease term or estimated useful life

Equipment installed at customer sites includes certain installation costs that qualify for capitalization. Software costs include certain internal and external costs associated with the development of software that are incurred during the application development stage. In addition, a modification or upgrade to existing software is capitalized only to the extent it results in additional functionality to existing software. Software maintenance and training costs are expensed as incurred. The Company capitalized internally developed software costs of $7.5 million, $3.0 million and $5.1 million during fiscal years 2022, 2021, and 2020 respectively.

Investment in Privately-held Securities

The Company holds an investment in privately-held equity securities which is recorded at cost and adjusted based on observable transactions for same or similar investments or for impairment. Investment gains and losses are recorded in other income, net.

Valuation of privately-held securities requires judgment due to the lack of readily available observable market data. The carrying value is not adjusted if there are no identified events that would indicate a need for upward or downward adjustments or changes in circumstances that may indicate impairment. In determining the estimated fair value of its investment, the Company utilizes the most recent data available. The Company assesses it investment for impairment quarterly using both qualitative and quantitative factors. If an investment is considered impaired, an impairment loss is recognized and a new carrying value is established for the investment.

The Company considered the existence of impairment indicators by evaluating the financial and liquidity position and as a result, a $1.3 million impairment during the year ended December 31, 2022 was recorded within other income, net on the consolidated statements of operations. There were no indicators of impairment during the year ended December 31, 2021. See Note 16, Other Significant Transactions for more information.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. Goodwill is assessed for impairment at least annually at the reporting unit level or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable. If, based on a qualitative analysis, it is determined more-likely-than-not that the fair value of the reporting

unit is less than its carrying amount, a one-step quantitative impairment test is performed. Reporting units are identified by assessing whether the components of the Company’s operating segments constitute businesses for which discrete financial information is available and if segment management regularly reviews the operating results of those components. Application of the goodwill impairment test requires judgment, including the identification of reporting units, the assignment of assets (including goodwill) to those reporting units and the determination of the fair value of each reporting unit. The date of the Company’s annual impairment analysis is October 1. The Company has four reporting units for the purposes of assessing potential impairment of goodwill.

In connection with the Company's 2022 assessment of goodwill impairment, it qualitatively concluded that the Commercial Services and Government Solutions North America reporting units did not have indicators of impairment. It did however, perform quantitative impairment reviews on the Parking Solutions and Government Solutions International reporting units, both of which were acquired in 2021. The fair values of these reporting units were determined in accordance with the discounted cash flow method using currently available financial forecasts. Based on the results of the Company's quantitative review, it concluded no adjustment to goodwill was necessary for fiscal year 2022. Moreover, the Company utilized earnings multiples to estimate the fair values of its Commercial Services and Government Solutions reporting units and corroborated the reasonableness of the reporting unit fair values by reconciling to the Company’s market capitalization as of October 1, 2022. The qualitative analyses performed as of October 1 for fiscal years 2021 and 2020 did not have indicators of impairment.

Intangible Assets

Intangible assets represent existing customer relationships, trademarks, developed technology (hardware and software) and non-compete agreements. Intangible assets are amortized over their respective estimated useful lives on a straight-line basis, which approximates the utilization of their expected future benefits. Amortization of intangible assets is included in depreciation, amortization and (gain) loss on disposal of assets, net in the consolidated statements of operations.

The Company annually evaluates the estimated remaining useful lives of its intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets (including intangible assets with finite useful lives and installation and service parts) for impairment whenever events or circumstances indicate that the carrying amount of an asset or an asset group may not be fully recoverable. The Company assesses recoverability by comparing the estimated undiscounted future cash flows expected to be generated by the asset or asset group with its carrying value. If the carrying value of the asset or asset group exceeds the estimated undiscounted future cash flows, an impairment loss is recognized for the difference between the estimated fair value and the carrying value.

The Company did not have any indicators of impairment related to long-lived assets for the years ended December 31, 2021 or 2020. The Company had $0.7 million of impairment related to certain photo enforcement programs that ended during the year ended December 31, 2022 within the depreciation, amortization and (gain) loss on disposal of assets, net line item on the consolidated statements of operations.

Self-Insurance

The Company is self-insured for medical costs and has stop-loss insurance policies to limit its exposure to individual and aggregate claims made. Liabilities for these programs are estimated based on outstanding claims and claims estimated to be incurred but not yet reported using historical loss experience. These estimates are subject to variability due to changes in trends of losses for outstanding claims and incurred but not reported claims, including external factors such as the number, and cost of, claims, benefit level changes and claim settlement patterns.

Warrants

As of December 31, 2022, there were warrants outstanding to acquire 19,999,967 shares of the Company’s Class A Common Stock including: (i) 6,666,666 Private Placement Warrants and (ii) 13,333,301 warrants issued in connection with the IPO (the “Public Warrants” and, together with the Private Placement Warrants, the “Warrants”).

The Warrants entitle the registered holder to purchase one share of our Class A Common Stock at a price of $11.50 per share, subject to certain adjustments.

The Warrants became exercisable on November 16, 2018, 30 days following the completion of the Business Combination, and expire five years after that date, or earlier upon redemption or liquidation. The Company may redeem the outstanding Public Warrants at a price of $0.01 per warrant, if the last sale price of its Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third business day before it sends the notice of redemption to the Warrant holders. The Private Placement Warrants, however, are nonredeemable so long as they are held by Gores Sponsor II, LLC or its permitted transferees.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance under FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares, among other conditions for equity classification.

For warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The Company’s Public Warrants meet the criteria for equity classification and accordingly, are reported as a component of shareholders’ equity while the Company’s Private Placement Warrants do not meet the criteria for equity classification because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares and are instead classified as a liability. The fair value of the Private Placement Warrants is estimated at period-end using a Black-Scholes option pricing model. Shares issuable under the Warrants are considered for inclusion in the diluted share count in accordance with GAAP. As the shares issuable under the Warrants are issuable shares when exercised by the holders, they are included when computing diluted income (loss) per share, if such exercise is dilutive to income (loss) per share.

Interest Rate Swap

In December 2022, the Company entered into a cancellable interest rate swap agreement to hedge its exposure to interest rate fluctuations associated with the LIBOR portion of the variable interest rate on its 2021 Term Loan. Under the interest rate swap agreement, the Company pays a fixed rate and the counterparty pays a variable interest rate. The Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement with the counterparty which provides for the net settlement of all, or a specified group, of derivative transactions through a single payment. The notional amount on the interest rate swap is $675 million. The Company has the option to terminate the interest rate swap agreement starting in December 2023, and monthly thereafter until December 2025. The Company is treating the interest rate swap as an economic hedge for accounting purposes and any changes in the fair value of the derivative instrument (including accrued interest) are recorded in the consolidated statements of operations within the gain on interest rate swap line item. The Company recorded a $1.0 million gain on interest rate swap for the year ended December 31, 2022, which is recorded within operating activities on the consolidated statements of cash flows. The fair value of cash flows of approximately $1.0 million due within one year are presented in the accrued liabilities line item and the fair value of cash flows of $2.0 million received greater than one year are within the other non-current assets line item on the consolidated balance sheet as of December 31, 2022. See below for discussion on the fair value measurement of the interest rate swap, and Note 9, Long-term Debt, for additional information on the Company's mix of fixed and variable debt.

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement, includes a single definition of fair value to be used for financial reporting purposes, provides a framework for applying this definition and for measuring fair value under GAAP, and

establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are summarized as follows:

Level 1 – Fair value is based on observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2 – Fair value is determined using quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs other than quoted prices that are directly or indirectly observable.

Level 3 – Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as a pricing model, discounted cash flow, or similar technique.

The carrying amounts reported in the Company’s consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the immediate to short-term maturity of these financial instruments. The estimated fair value of the Company’s long term debt was calculated based upon available market information. The carrying value and the estimated fair value are as follows:

	Level in	December 31, 2022				December 31, 2021
	Fair Value	Carrying		Estimated		Carrying		Estimated
($ in thousands)	Hierarchy	Amount		Fair Value		Amount		Fair Value
2021 Term Loan	2	$	866,365	$	883,891	$	871,467	$	895,125
Senior Notes	2		345,615		313,250		344,918		355,250
Revolver	2		—		—		24,435		25,000

The fair value of the private placement warrant liabilities is measured on a recurring basis and is estimated using the Black-Scholes option pricing model using significant unobservable inputs, primarily related to estimated volatility, and is therefore classified within level 3 of the fair value hierarchy. The key assumptions used were as follows:

	December 31, 2022			December 31, 2021
Stock price	$	13.83		$	15.43
Strike price	$	11.50		$	11.50
Volatility		44.0	%		48.0	%
Remaining life (in years)		0.8			1.8
Risk-free interest rate		4.74	%		0.66	%
Expected dividend yield		0.0	%		0.0	%
Estimated fair value	$	3.61		$	5.77

The Company is exposed to valuation risk on these Level 3 financial instruments. The risk of exposure is estimated using a sensitivity analysis of potential changes in the significant unobservable inputs, primarily the volatility input that is the most susceptible to valuation risk. A 5% increase to the volatility input at December 31, 2022 would increase the estimated fair value by $0.19 per unit. A 5% decrease to the volatility input at December 31, 2022 would decrease the estimated fair value by $0.18 per unit. The following summarizes the changes in fair value of private placement warrant liabilities included in net income (loss) for the respective periods:

($ in thousands)	December 31, 2022			December 31, 2021
Beginning balance	$	38,466		$	30,866
Change in fair value of private placement warrants		(14,400	)		7,600
Ending balance	$	24,066		$	38,466

The Company has an equity investment measured at cost which is only adjusted to fair value if there are identified events that would indicate a need for an upward or downward adjustment or changes in circumstances that may indicate impairment. The estimation of fair value requires the use of significant unobservable inputs, such as voting rights and obligations in the securities held, and is therefore classified within level 3 of the fair value hierarchy. The carrying value of the investment was $2.1 million and $3.7 million as of December 31, 2022 and 2021, respectively. The Company considered the existence of impairment indicators by evaluating the financial and liquidity position and as a result, remeasured the equity investment to fair value and recorded an impairment of $1.3 million

during the year ended December 31, 2022. There were no identified events that required a fair value adjustment as of December 31, 2021.

The fair value of the contingent consideration payable in connection with the NuPark acquisition was $1.5 million at December 13, 2021 acquisition date and was classified within level 3 of the fair value hierarchy. The valuation of the contingent consideration was measured using a discounted cash flow model and the significant unobservable inputs used in the measurement relate to forecasts of annualized revenue developed by the Company. During fiscal year 2022, the Company made payments to settle in full the contingent consideration payable to Passport Labs Inc, and there was no remaining payable as of December 31, 2022.

The recurring fair value measurement of the interest rate swap was valued based on observable inputs for similar assets and liabilities including swaption values and other observable inputs for interest rates and yield curves and is classified within level 2 of the fair value hierarchy.

Asset Retirement Obligation

The Company records obligations to perform certain retirement activities on camera and speed enforcement systems in the period that the related assets are placed in service. Asset retirement obligations are contractual obligations to restore property to its initial state. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to operating expenses in the consolidated statements of operations. The associated asset retirement obligation is capitalized as part of the related asset’s carrying value and is depreciated over the asset’s estimated remaining useful life. When events and circumstances indicate that the original estimates used for asset retirement obligations may need revision, the Company reassesses the assumptions used and adjusts the liability appropriately.

Deferred Financing Costs

Deferred financing costs consist of the costs incurred to obtain long-term financing, including the Company’s credit facilities (See Note 9). These costs, which are a reduction to long-term debt on the consolidated balance sheets, are amortized over the term of the related debt, using the effective interest method for term debt and the straight-line method for revolving credit facilities. Amortization of deferred financing costs for fiscal years 2022, 2021 and 2020 was $5.5 million, $5.2 million, and $5.4 million respectively.

Income Taxes

The Company accounts for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the financial statements. Deferred tax assets generally represent items that can be used as a tax deduction or credit in tax returns in future years, while deferred tax liabilities generally represent items that generate a future tax liability for items where deductions have been accelerated for tax purposes. The Company provides a valuation allowance for deferred tax assets if it is more likely than not that some portion or all of the tax assets will not be realized. The Company calculates the valuation allowance in accordance with the authoritative guidance relating to income taxes, which requires an assessment of both positive and negative evidence regarding the realizability of these deferred tax assets when measuring the need for a valuation allowance. Significant judgment is required in determining any valuation allowance against deferred tax assets. The realization of deferred tax assets can be affected by, among other things, the nature, frequency, and severity of current and cumulative losses, forecasts of future profitability, the length of statutory carryforward periods, our experience with utilizing operating losses and tax credit carryforwards by jurisdiction, the reversal of existing taxable temporary differences and tax planning alternatives and strategies that may be available.

The Company’s effective tax rate is based on income, statutory tax rates, differences in the deductibility of certain expenses and inclusion of certain income items between financial statement and tax return purposes, and tax planning opportunities available to it in the various jurisdictions in which it operates. Under GAAP, if the Company determines that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, the Company recognizes the benefit. Tax code and regulations require certain items to be included in the tax return at different times than when those items are required to be recorded in the consolidated

financial statements. As a result, the effective tax rate reflected in its consolidated financial statements is different from that reported in its tax returns. Some of these differences are permanent, such as meals and entertainment expenses that are not fully deductible on the Company’s tax returns, and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities.

The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax provision or benefit.

Stock-based Compensation

In October 2018, the Company established the Verra Mobility 2018 Equity Incentive Plan (the “2018 Plan”) which provides for a variety of stock-based awards for issuance to employees and directors. The Company grants RSUs, stock options and performance share units (“PSUs”).

The Company recognizes the fair value of RSUs based on the Company’s common stock price at market close on the date of the grant. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options, and uses the Monte Carlo simulation model to determine the fair value of PSUs containing market conditions. The Black-Scholes model requires an assumption regarding the expected life of the stock option, which the Company estimated to be 6.25 years by applying the short-cut method permitted under SEC Staff Accounting Bulletin No. 110. The expected term of PSUs granted was three years, which matches the awards’ performance period. RSUs and stock options vest based on the continued service of the recipient. PSUs are issued upon continued service along with the relative satisfaction of a market condition that measures the Company’s total stockholder return relative to a comparably calculated return for a peer group during the performance period. In addition, the Black-Scholes and the Monte Carlo models require assumptions to be made regarding the expected volatility of the Company’s stock price. Stock price volatility is determined by averaging an implied volatility with the measure of historical volatility.

The following represents our weighted average assumptions for stock options and PSUs granted for the respective periods:

	For the Year Ended December 31,
	2022			2021			2020
Stock options
Weighted average expected volatility		45.1	%		47.7	%		34.5	%
Weighted average risk-free interest rate		2.94	%		0.94	%		0.73	%
PSUs
Weighted average expected volatility		48.0	%		50.4	%		34.0	%
Weighted average risk-free interest rate		2.78	%		0.33	%		0.61	%

Compensation expense for share-based awards is determined based on the grant date fair value. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based award. The compensation expense for the PSUs is recognized over the requisite service period regardless of whether the market condition is satisfied. Forfeitures are accounted for as they occur. See Note 14, Equity Incentive Plan, for more information on the Company’s share-based awards.

Revenue Recognition

Nature of Goods and Services

The following is a description of principal activities, separated by reportable segments, from which the Company generates revenue:

Commercial Services. The Commercial Services segment offers toll and violation management solutions for the commercial fleet and rental car industries. The Company determined its performance obligation is a distinct stand-ready obligation, as there is an unspecified quantity of services provided that does not diminish, and the customer is being charged only when it uses the Company’s services, such as toll payment, title and registration, etc. Payment terms for contracts with commercial fleet and rental car companies vary, but are usually billed as services are performed. The Company recognizes revenue from these services over time.

Government Solutions. The Government Solutions segment principally generates revenue by providing complete, end-to-end speed, red-light, school bus stop arm, and bus lane enforcement solutions. Products, when sold, are typically sold together with the services in a bundle for a majority of customers. The average initial term of a contract is 3 to 5 years. Payment terms for contracts with government agencies vary depending on whether the consideration is fixed or variable. Payment terms for contracts with fixed consideration are usually based on equal installments over the duration of the contract. Payment terms for contracts with variable consideration are usually billed and collected as citations are issued or paid. In instances when the consideration expected from the customer is subject to variation, any variable consideration affecting revenue recognition is allocated to the distinct period (the monthly period) that it relates to.

For bundled offerings, the Company accounts for individual products and services separately if they are distinct – i.e., if a product or service is separately identifiable from other items in the bundle and if a customer can benefit from it as a stand-alone item. The consideration is allocated between separate products and services in a bundle based on their stand-alone selling prices (“SSP”). The Company estimates the SSP for its services based upon observable evidence, market conditions and other relevant inputs. If products are sold without the related services, no allocation is required.

•Product sales (sale of camera systems and installation) – the camera systems and related installation services are highly interdependent and interrelated and are accounted for as a single performance obligation. The revenues for this performance obligation are generally recognized at the point in time when the installation process is completed and the camera system is ready to perform the services as expected by the customer. Generally, this occurs at site acceptance or first citation.

•Service revenue – the Company has determined its performance obligation is to provide a complete end-to-end safety and enforcement solution. Promises include providing a system to capture images, processing images taken by the camera, forwarding eligible images to the police department and processing payments on behalf of the municipality. The Company has determined that certain of the promises to its customers are capable of being distinct as they are capable of providing some measure of benefit to the customer either on their own or together with other resources that are readily available to the customer. However, the Company has determined the promises to its customers do not meet the criterion of being distinct within the context of its contracts. The Company would not be able to fulfill its promises individually as its customers could not obtain the intended benefit from the contract without the Company fulfilling all promises. Accordingly, the Company concluded that each contract represents one service offering and is a single performance obligation to the customer. Further, the Company accounts for all the services as a single continuous service. The Company applied the series guidance for those services as it stands ready to deliver those services over the contract period. The Company recognizes revenue from services over time, as they are performed.

Parking Solutions. The T2 Systems business offers an integrated suite of parking software and hardware solutions to its customers. Revenue is derived primarily from the sale of software as a service (“SaaS”) and specialized hardware. For bundled offerings, the Company accounts for individual products and services separately if they are distinct and allocate the transaction price based on the relative SSP. For substantially all performance obligations except SaaS subscriptions, the Company is able to establish the SSP based on the observable prices of products or services sold separately in comparable transactions. The Company’s estimates of SSP are reassessed on a periodic basis or when facts and circumstances change. The Company is unable to establish the SSP for its software licenses based on observable prices given the same products are sold at a broad range of prices and a representative SSP is not discernible from past transactions or other observable evidence, as such, the SSP for software licenses included in a contract with multiple performance obligations is generally determined by applying a residual approach.

•The Company’s hosted parking management software products provide customers the ability to manage access to their parking lots and garages, issue physical or virtual parking permits and manage citations issued through enforcement devices. Revenue derived from these SaaS products is recognized ratably over the contractual service period beginning on the date the service is made available to the customer.

•Service revenue derived from the Company’s professional services are recognized over time as the services are performed. Revenues for fixed-price service projects are generally recognized over time applying input methods to estimate progress to completion.

•Revenue from product sales is recognized at a point in time when a customer takes control of the hardware, which typically occurs when the product is delivered to the customer and ownership is transferred to the customer.

Deferred Revenue

Deferred revenue represents amounts that have been invoiced in advance which are expected to be recognized as revenue in future periods, and it primarily relates to the Government Solutions and Parking Solutions customers. As of December 31, 2021 and 2022, the Company had approximately $8.9 million and $12.2 million of deferred revenue in the Government Solutions segment. The majority of the remaining performance obligations as of December 31, 2022 are expected to be completed and recognized in 2023 and $4.7 million is expected to be recognized between 2024 through 2027. As of December 31, 2021 and 2022, the Company had approximately $20.9 million and $21.2 million of deferred revenue in the Parking Solutions segment. The majority of the remaining performance obligations as of December 31, 2022 are expected to be completed and recognized as revenue in 2023 and $0.5 million is expected to be recognized in 2024.

Credit Card Rebates

The Company earns volume rebates from total spend on purchasing cards and recognizes the income in other income, net in the consolidated statements of operations. For the fiscal years ended December 31, 2022, 2021 and 2020, the Company recorded $14.5 million, $11.3 million, and $8.5 million respectively, related to rebates.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs for the fiscal years ended December 31, 2022, 2021 and 2020, were $1.0 million, $0.7 million and $0.8 million, respectively, and were included in selling, general, and administrative expenses in the consolidated statements of operations.

Foreign Currency

Assets and liabilities denominated in foreign currencies that differ from their functional currencies are re-measured at the exchange rate on the balance sheet date. The foreign currency effect of the re-measurement is included in other income, net in the consolidated statements of operations. The impact of foreign currency re-measurement was (losses) gains of $(0.7) million, $(0.2) million and $0.4 million for the fiscal years ended December 31, 2022, 2021 and 2020, respectively.

The assets and liabilities of our foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at current exchange rates while revenue and expenses are translated from functional currencies at average monthly exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive loss in stockholders’ equity.

Acquisitions

The Company applies the acquisition method to account for business combinations. The Company allocates the fair value of the purchase price consideration to assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair value of the identifiable assets and liabilities is recorded as goodwill. The Company includes the results of operations of businesses acquired from the date of the respective acquisition. Any transaction costs associated with acquisitions are expensed as incurred.

Measurement period adjustments to preliminary purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of any changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed at the acquisition date. If applicable, we estimate the fair value of contingent consideration payments in determining the purchase price. Contingent consideration is adjusted to fair value in subsequent periods as an increase or decrease in selling, general and administrative expenses.

The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, and includes the use of independent valuation specialists to assist the Company in estimating fair values of acquired tangible and intangible assets. Although the Company believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from estimates.

Recent Accounting Pronouncements

Accounting Standards Adopted

In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another topic. It specifically addresses the measurement and recognition of the effect of a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option if it remains equity-classified after the modification or exchange. The Company adopted this standard as of January 1, 2022, which did not have an impact on its financial statements and related disclosures, as the Company had no transactions subject to the standard. If the Company were to have modifications or exchanges in the future, such guidance would apply.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The amendments require annual disclosures regarding the nature of any transactions with a government accounted for by applying a grant or contribution accounting model by analogy and the related accounting policy used, the effect of the assistance on the entity’s financial statements, and the significant terms and conditions of the transactions. The Company adopted the ASU as of January 1, 2022, which did not have a material impact on its financial statements or related disclosures.

Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. It provides optional expedients and exceptions for applying GAAP to contract modifications, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which extended the period of time stakeholders can utilize the reference rate reform relief guidance for two additional years until December 31, 2024.

Under the terms of the 2021 Term Loan (as defined below) discussed in Note 9, Long-term Debt, in the event there is a benchmark transition away from LIBOR, a benchmark replacement rate has been defined in the 2021 Term Loan agreement along with the mechanism for such a transition to take place. The Company does not anticipate this transition will have a material impact on its consolidated financial statements.

On June 30, 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual

restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also requires entities with investments in equity securities subject to contractual sale restrictions to disclose certain qualitative and quantitative information about such securities. The guidance is effective for fiscal years, including interim periods beginning after December 15, 2023. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements.

XML

Acquisitions

12 Months Ended

Dec. 31, 2022

Business Combinations [Abstract]

Acquisitions

3.Acquisitions

Redflex Acquisition

On June 17, 2021, the Company completed the acquisition of Redflex, an Australian public company formerly listed on the Australian Securities Exchange. At the closing of the Redflex acquisition, VM Consolidated, Inc., an indirect wholly owned subsidiary of the Company, purchased one hundred percent of the outstanding equity of Redflex at A$0.96 per share at consideration of A$152.5 million, or approximately US$117.9 million. Transaction costs for Redflex were $9.7 million which primarily related to professional fees and other expenses related to the acquisition. At the date of acquisition, Redflex was a provider of intelligent traffic management products and services that are sold and managed in the Asia Pacific, North America, Europe, and Middle East regions. Redflex designed, manufactured, and operated a range of platform-based solutions, utilizing advanced sensor and image capture technologies to enable active management of state and local motorways. The Company has included the financial results of Redflex in the financial statements from the date of acquisition.

The final allocation of the purchase consideration is summarized as follows:

($ in thousands)
Assets acquired
Cash and cash equivalents	$	8,760
Restricted cash		2,163
Accounts receivable		6,870
Unbilled receivables		5,283
Property and equipment		29,809
Deferred tax assets		10,315
Other assets		19,247
Trademark		900
Customer relationships		25,900
Developed technology		18,200
Total assets acquired		127,447
Liabilities assumed
Accounts payable and accrued liabilities		31,936
Deferred revenue		8,048
Long-term debt		14,014
Other long-term liabilities		11,736
Total liabilities assumed		65,734
Goodwill		56,214
Total purchase consideration	$	117,927

The Company finalized the evaluation of historical Redflex tax positions and the impact on assumed uncertain tax positions and other tax attributes during the three months ended March 31, 2022 which did not result in any changes to the previously disclosed amounts at December 31, 2021.

Goodwill consists largely of the expected cash flows and future growth anticipated for the Company and was assigned to the Company’s Government Solutions segment. The goodwill is not deductible for tax purposes. The customer relationships value was based on the multi-period excess earnings methodology utilizing projected cash flows. The significant assumptions used to value customer relationships included, among others, customer churn rates, forecasted revenue growth rates attributable to existing customers, forecasted EBITDA margins and the discount rate.

The values for the trademark and the developed technology related assets were based on a relief-from-royalty method. The significant assumptions used to value these intangible assets included, among others, forecasted revenue growth rates, royalty rates and the expected obsolescence curve. The trademark, customer relationships and the developed technology related assets were assigned useful lives of 5.0 years, 10.0 years, and 8.7 years, respectively.

T2 Systems Acquisition

On December 7, 2021, the Company acquired all of the outstanding shares of T2 Systems, which offers an integrated suite of parking software and hardware solutions to its customers. This acquisition supports the Company’s strategy to expand and diversify into new markets within the mobility sector. The Company has included the financial results of T2 Systems in the consolidated financial statements from the date of acquisition, and reported within the Parking Solutions segment.

The Company paid a purchase price of $353.2 million. Transaction costs for T2 Systems were $3.4 million which primarily related to professional fees and other expenses related to the acquisition.

The final allocation of the purchase consideration is summarized as follows:

($ in thousands)
Assets acquired
Cash and cash equivalents	$	13,866
Restricted cash		228
Accounts receivable		9,673
Unbilled receivables		2,153
Inventory		7,467
Property and equipment		3,336
Prepaid and other assets (a)		7,031
Trademark		3,200
Customer relationships		164,300
Developed technology		19,300
Total assets acquired		230,554
Liabilities assumed
Accounts payable and accrued liabilities		10,379
Deferred revenue (a)		21,002
Deferred tax liabilities (a)		37,690
Other liabilities		4,228
Total liabilities assumed		73,299
Goodwill (a)		195,982
Total assets acquired and liabilities assumed	$	353,237

(a) The Company adjusted the fair values from the initial valuation as of December 31, 2021 to reflect new information obtained about facts and circumstances that existed as of the T2 Systems acquisition date. The measurement period adjustments include an increase of $0.6 million to the deferred tax liabilities, a $0.4 million decrease to deferred tax assets included within prepaid and other assets, a $0.2 million decrease in deferred revenue, and a net offsetting increase of $0.8 million to the goodwill line item. There was no impact to the consolidated statement of operations as a result of these adjustments.

Goodwill consists largely of the expected cash flows and future growth anticipated for the Company and was assigned to the Company’s Parking Solutions segment. The goodwill is not deductible for tax purposes. The customer relationships value was based on the multi-period excess earnings methodology utilizing projected cash flows. The significant assumptions used to value customer relationships included, among others, customer upsell and churn rates, forecasted revenue growth rates attributable to existing customers, forecasted EBITDA margins and the discount rate. The values for the trademark and the developed technology related assets were based on a relief-from-royalty method. The significant assumptions used to value these intangible assets included, among others, forecasted revenue growth

rates, royalty rates and the expected obsolescence curve. The trademark, customer relationships and the developed technology related assets were assigned useful lives of 10.0 years, 10.0 years, and 6.1 years, respectively.

NuPark Acquisition

On December 13, 2021, the Company completed the acquisition of NuPark (“NuPark”), a provider of parking services and permit management product platform from Passport Labs, Inc., which expanded the Company’s presence in the United States in the Parking Solutions segment. The acquisition date fair value of the consideration transferred to Passport Labs, Inc. was approximately $7.0 million, which consisted primarily of $5.5 million of cash (inclusive of a $0.5 million indemnity holdback) and $1.5 million of contingent consideration payable. The Company recorded $0.3 million of tangible assets, $4.9 million of customer relationships intangible assets valued using a multi-period excess earnings methodology, with an estimated useful life of 10.0 years, and $1.3 million of assumed liabilities, which was primarily deferred revenue. Goodwill recorded was $3.2 million for future growth anticipated for the Company and is deductible for tax purposes. The Company has included the financial results of NuPark in the consolidated financial statements from the date of acquisition, which were not material. The transaction costs for the acquisition were not material.

During fiscal year 2022, the Company recorded a measurement period adjustment to reduce the customer relationship intangible assets’ value by $0.6 million. Additionally, the Company made payments that totaled approximately $0.9 million to settle in full the contingent consideration payable to Passport Labs Inc.

Pro Forma Financial Information (Unaudited)

The pro forma information below gives effect to the Redflex and T2 systems acquisitions as if they had been completed on the first day of each period presented. Pro forma information for NuPark was not provided as it was not material. The pro forma results of operations are presented for information purposes only. As such, they are not necessarily indicative of the Company’s results had the Redflex and T2 systems acquisitions been completed on the first day of each period presented, nor do they intend to represent the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions and does not reflect additional revenue opportunities following the acquisition of Redflex and T2 Systems. The pro forma information includes adjustments to record the assets and liabilities associated with the Redflex and T2 Systems acquisitions at their respective fair values and to give effect to the financing of the acquisitions.

	For the Year Ended December 31,
($ in thousands)	2021		2020
Revenue	$	650,567	$	530,807
Net income (loss)		30,099		(58,695	)

The pro forma results primarily include adjustments related to amortization of intangibles, depreciation expense, interest expense and related debt extinguishment costs from the debt refinancing transactions and exclusion of acquisition-related costs and certain capitalized costs related to operating leases and developed technology.

XML

Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2022

Prepaid Expense and Other Assets, Current [Abstract]

Prepaid Expenses and Other Current Assets

4.Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following at December 31:

($ in thousands)	2022		2021
Prepaid tolls	$	9,978	$	7,539
Prepaid services		9,171		8,643
Prepaid income taxes		4,629		5,324
Prepaid computer maintenance		5,492		3,742
Costs to fulfill a customer contract		3,193		3,364
Prepaid insurance		3,112		4,293
Deposits		2,057		6,742
Other		1,972		1,809
Total prepaid expenses and other current assets	$	39,604	$	41,456

XML

Property and Equipment, Net

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

5.Property and Equipment, Net

Property and equipment, net, consists of the following at December 31:

($ in thousands)	2022			2021
Equipment installed at customer sites	$	122,507		$	112,770
Software		30,288			24,207
Leasehold improvements		9,806			9,255
Computer equipment		20,274			14,215
Furniture		2,648			2,662
Automobiles		12,933			4,761
Construction in progress		19,357			12,169
Property and equipment		217,813			180,039
Less: accumulated depreciation		(108,038	)		(83,973	)
Property and equipment, net	$	109,775		$	96,066

Depreciation expense was $32.2 million, $26.8 million and $23.1 million for the fiscal years ended December 31, 2022, 2021 and 2020, respectively, including depreciation related to costs to develop or implement software for internal use of $3.4 million, $4.4 million and $4.3 million for the fiscal years ended December 31, 2022, 2021 and 2020, respectively.

XML

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

6.Goodwill and Intangible Assets

The following table presents the changes in the carrying amount of goodwill by reportable segment:

	Commercial			Government			Parking
($ in thousands)	Services			Solutions			Solutions		Total
Balance at December 31, 2020	$	426,689		$	159,746		$	—	$	586,435
Acquisition of Redflex		—			56,214			—		56,214
Acquisition of T2 Systems		—			—			195,226		195,226
Acquisition of NuPark		—			—			3,160		3,160
Foreign currency translation adjustment		(1,608	)		(560	)		—		(2,168	)
Balance at December 31, 2021		425,081			215,400			198,386		838,867
Measurement period adjustment (a)		—			—			756		756
Foreign currency translation adjustment		(5,361	)		(782	)		—		(6,143	)
Balance at December 31, 2022	$	419,720		$	214,618		$	199,142	$	833,480

(a) This is a measurement period adjustment related to the T2 Systems acquisition, see Note 3. Acquisitions for additional information.

Intangible assets consist of the following as of the respective period-ends:

	Weighted	Weighted	At December 31, 2022
	Average	Average	Gross
	Remaining	Amortization	Carrying			Accumulated
($ in thousands)	Useful Life	Period	Amount			Amortization
Trademarks	0.4 years	3.7 years	$	36,151		$	32,233
Non-compete agreements	0.1 years	5.0 years		62,529			60,926
Customer relationships	5.5 years	9.3 years		557,570			227,102
Developed technology	1.2 years	5.8 years		201,548			160,117
Gross carrying value of intangible assets				857,798		$	480,378
Less: accumulated amortization				(480,378	)
Intangible assets, net			$	377,420

	Weighted	Weighted	At December 31, 2021
	Average	Average	Gross
	Remaining	Amortization	Carrying			Accumulated
($ in thousands)	Useful Life	Period	Amount			Amortization
Trademarks	0.5 years	3.7 years	$	36,225		$	31,429
Non-compete agreements	1.0 years	5.0 years		62,555			49,982
Customer relationships	6.5 years	9.3 years		561,767			167,255
Developed technology	2.2 years	5.8 years		202,768			127,350
Gross carrying value of intangible assets				863,315		$	376,016
Less: accumulated amortization				(376,016	)
Intangible assets, net			$	487,299

Amortization expense was $106.2 million, $89.9 million and $93.5 million for fiscal years ended December 31, 2022, 2021 and 2020, respectively.

Estimated amortization expense in future years is expected to be:

($ in thousands)
2023	$	77,347
2024		66,859
2025		64,161
2026		57,170
2027		28,353
Thereafter		83,530
Total	$	377,420

XML

Accrued Liabilities

12 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

Accrued Liabilities

7.Accrued Liabilities

Accrued liabilities consist of the following at December 31:

($ in thousands)	2022		2021
Accrued salaries and wages	$	19,109	$	15,744
Current deferred tax liabilities		7,559		—
Current portion of operating lease liabilities		6,355		5,760
Accrued interest payable		4,459		4,209
Restricted cash due to customers		3,541		3,062
Payroll liabilities		2,136		1,876
Advanced deposits		1,029		2,554
Current portion of interest rate swap liability		977		—
Other		3,682		5,230
Total accrued liabilities	$	48,847	$	38,435

XML

Asset Retirement Obligation

12 Months Ended

Dec. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation

8.Asset Retirement Obligations

The following summarizes the changes in the Company’s asset retirement obligations for the years ended December 31:

($ in thousands)	2022			2021
Asset retirement obligations, beginning balance	$	11,824		$	6,409
Liabilities incurred (a)		944			5,210
Accretion expense		445			308
Liabilities settled		(220	)		(103	)
Asset retirement obligations, ending balance	$	12,993		$	11,824

(a) For the year ended December 31, 2022, this includes approximately $0.4 million increase resulting from a change in estimate for the impact of inflation. For the year ended December 31, 2021, this includes $3.9 million of asset retirement obligations assumed as part of the Redflex acquisition in 2021, and a $1.2 million increase resulting from a change in estimate for the impact of inflation.

XML

Long-term Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Long-term Debt

9.Long-term Debt

The following table provides a summary of the Company’s long-term debt at December 31:

($ in thousands)	2022			2021
2021 Term Loan, due 2028	$	886,106		$	895,125
Senior Notes, due 2029		350,000			350,000
PPP Loan		—			2,933
Revolver		—			25,000
Less: original issue discounts		(5,637	)		(6,753	)
Less: unamortized deferred financing costs		(18,489	)		(22,551	)
Total long-term debt		1,211,980			1,243,754
Less: current portion of long-term debt		(21,935	)		(36,952	)
Total long-term debt, net of current portion	$	1,190,045		$	1,206,802

The following table presents the aggregate principal and interest payments in future years on long-term debt as of December 31, 2022:

($ in thousands)	Principal		Interest (1)
2023	$	21,935	$	87,755
2024		9,019		87,056
2025		9,019		86,172
2026		9,019		85,474
2027		9,019		84,775
Thereafter		1,178,095		33,015
Total	$	1,236,106	$	464,247

(1) The variable interest rate in effect as of December 31, 2022 was used to calculate interest payments for the 2021 Term Loan.

2021 Term Loan and Senior Notes

In March 2021, VM Consolidated, Inc., the Company’s wholly owned subsidiary (“VM Consolidated”), 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 $650.0 million, maturing on March 26, 2028, and an accordion feature providing for an additional $250.0 million of term loans, subject to satisfaction of certain requirements. In connection with the 2021 Term Loan, the Company had an offering discount cost of $3.3 million and $0.7 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan.

In addition, in March 2021, VM Consolidated issued an aggregate principal amount of $350 million in Senior Unsecured Notes (the “Senior Notes”), due on April 15, 2029. In connection with the issuance of the Senior Notes, the Company 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.

The net proceeds from both the 2021 Term Loan and the Senior Notes were used in March 2021 to repay in full all outstanding debt which was represented by the First Lien Term Loan Credit Agreement (as amended, the “2018 Term Loan”) with a balance of $865.6 million.

On December 7, 2021, VM Consolidated entered into an agreement to exercise the accordion feature under the 2021 Term Loan, borrowing $250.0 million in incremental term loans (“Incremental Term Loan”). The proceeds from the Incremental Term Loan were used, along with cash on hand, to fund the acquisition of T2 Systems, including repayment in full all outstanding debt for T2 Systems. In connection with the Incremental Term Loan, the Company had an offering discount cost of $1.3 million and $3.8 million of deferred financing costs, both of which were capitalized and are amortized over the remaining life of the 2021 Term Loan. The Incremental Term Loan accrued interest from the date of borrowing until December 31, 2021, at which time, it was combined with the 2021 Term Loan to be a single tranche of term loan borrowings. The total principal outstanding under the 2021 Term Loan, which includes the Incremental Term Loan, was $886.1 million at December 31, 2022.

The 2021 Term Loan is repayable at 1.0% per annum of the amount initially borrowed, paid in quarterly installments. It bears interest based, at the Company’s option, on either (1) LIBOR plus an applicable margin of 3.25% per annum, or (2) an alternate base rate plus an applicable margin of 2.25% per annum. As of December 31, 2022, the interest rate on the 2021 Term Loan was 7.6%.

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, beginning with the year ending December 31, 2022), 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%

The Company will make a $12.9 million mandatory prepayment of excess cash flows during the first quarter of fiscal year 2023, which was classified as current portion of long-term debt in the consolidated balance sheet at December 31, 2022. We did not have a mandatory prepayment of excess cash flow for the fiscal year ended December 31, 2021.

Interest on the Senior Notes is fixed at 5.50% per annum and is payable on April 15 and October 15 of each year. On or after April 15, 2024, the Company 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
2024	102.750%
2025	101.375%
2026 and thereafter	100.000%

In addition, the Company may redeem up to 40% of the Senior Notes before April 15, 2024, with the net cash proceeds from certain equity offerings.

The Company evaluated the March 2021 refinancing transactions on a lender-by-lender basis and accounted for the portion of the transaction that did not meet the accounting criteria for debt extinguishment as a debt modification.

Accordingly, the Company recognized a loss on extinguishment of debt of $5.3 million on the 2018 Term Loan during the year ended December 31, 2021, consisting of a $4.0 million write-off of pre-existing deferred financing costs and discounts and $1.3 million of lender and third-party costs associated with the issuance of the 2021 Term Loan.

PPP Loan

During fiscal year 2020, Redflex received a $2.9 million loan from the U.S. Small Business Administration (“SBA”) as part of the Paycheck Protection Program (“PPP Loan”) to offset certain employment and other allowable costs incurred as a result of the COVID-19 pandemic. In early 2021, Redflex applied for forgiveness of this loan, and on September 23, 2022, the Company was notified by the SBA that the loan, together with accrued interest, had been fully forgiven under the provisions of the PPP Loan program. Accordingly, the Company recognized a $3.0 million gain on extinguishment of debt in the consolidated statement of operations for the year ended December 31, 2022.

The Revolver

The Company has a Revolving Credit Agreement (the “Revolver”) with a commitment of up to $75.0 million available for loans and letters of credit. The Revolver matures on December 20, 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) LIBOR plus an applicable margin, or (2) an alternate base rate, plus an applicable margin. The margin percentage applied to (1) LIBOR 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 the Company’s average availability to borrow under the commitment. At December 31, 2021, the Company had $25.0 million in outstanding borrowings on the Revolver, which was repaid in full in January 2022. At December 31, 2022, the availability to borrow was $74.8 million, net of $0.2 million of outstanding letters of credit.

Interest on the unused portion of the Revolver is payable quarterly at 0.375% and the Company is also required to pay participation and fronting fees at 1.38% on $0.2 million of outstanding letters of credit as of December 31, 2022.

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 the Company’s assets are pledged as collateral to secure the Company’s indebtedness under the 2021 Term Loan. At December 31, 2022, the Company was compliant with all debt covenants.

Interest Expense

The Company recorded interest expense, including amortization of deferred financing costs and discounts, of $69.4 million, $44.9 million and $40.9 million for the fiscal years ended December 31, 2022, 2021 and 2020 respectively.

The weighted average effective interest rates on the Company’s outstanding borrowings were 7.0% and 4.1% at December 31, 2022 and December 31, 2021, respectively.

See Note 2, Significant Accounting Policies, for additional information on the interest rate swap entered into in December 2022 to hedge the Company's exposure against rising interest rates.

XML

Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

10.Leases

The Company’s operating leases primarily consist of office, equipment and vehicle leases expiring at various dates through April 2035. The Company has lease agreements with lease and non-lease components and has elected to account for such components as a single lease component. The Company recognizes and measures contracts containing a lease and determines lease classification at commencement. Right of use operating assets and lease liabilities are measured based on the estimated present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses its estimated incremental borrowing rate when the rate implicit in

the lease cannot be readily determined. The estimated incremental borrowing rate is based upon information available at lease commencement including publicly available data for debt instruments. The lease term includes periods covered by options to extend when it is reasonably certain the Company will exercise such options as well as periods subsequent to an option to terminate the lease if it is reasonably certain the Company will not exercise the termination option. Certain of the lease agreements have rent abatement and escalating rental payment provisions. Operating lease costs are recognized on a straight-line basis over the lease term. Variable lease costs are recognized as incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company does not have material short-term leases and does not engage in subleasing activities.

As of December 31, 2022, operating leases had a remaining weighted average lease term of 8.6 years and operating lease liabilities were measured using a weighted average discount rate of 5.0%. The total operating lease costs for the fiscal years ended December 31, 2022, 2021 and 2020 were $8.8 million, $7.5 million and $5.3 million, respectively. Variable lease costs for fiscal years ended December 31, 2022, 2021 and 2020 were approximately $1.5 million, $1.4 million and $1.1 million, respectively. Finance leases for the Company are not material.

The following is a summary of the operating lease liabilities as of December 31:

($ in thousands)	2022		2021
Operating lease liabilities, net of current portion	$	33,362	$	34,984
Current portion		6,202		5,760
Total operating lease liabilities	$	39,564	$	40,744

The following provides future maturities of operating lease liabilities as of December 31, 2022:

($ in thousands)
2023	$	8,107
2024		7,736
2025		5,329
2026		4,440
2027		3,341
Thereafter		21,033
Total minimum payments		49,986
Less: amount representing interest		(10,422	)
Total	$	39,564

XML

Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

11.Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net income (loss) per share is calculated by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method.

The components of basic and diluted net income (loss) per share are as follows:

	For the Year Ended December 31,
(In thousands, except per share data)	2022		2021		2020
Numerator:
Net income (loss)	$	92,475	$	41,449	$	(4,578	)
Denominator:
Weighted average shares - basic		152,848		159,983		161,632
Common stock equivalents		6,178		3,795		—
Weighted average shares - diluted		159,026		163,778		161,632
Net income (loss) per share - basic	$	0.61	$	0.26	$	(0.03	)
Net income (loss) per share - diluted	$	0.50	$	0.25	$	(0.03	)
Antidilutive shares excluded from diluted net income (loss) per share:
Contingently issuable shares (1)		5,000		5,000		5,000
Public warrants		—		—		13,333
Private placement warrants		—		6,667		6,667
Non-qualified stock options		1,149		1,018		614
Performance share units		157		130		106
Restricted stock units		742		432		2,203
Total antidilutive shares excluded		7,048		13,247		27,923

(1) Contingently issuable shares relate to the earn-out agreement as discussed in Note 16, Other Significant Transactions.

XML

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

12.Income Taxes

A provision of the Tax Cuts and Jobs Act of 2017 became effective on January 1, 2022. This provision requires companies to capitalize and amortize research and development (“R&D”) expenses over 5 years (and 15 years for non-U.S. R&D expenses) as opposed to deducting those expenses in the year they are incurred. The enacted provision did not have a material impact on the Company’s consolidated financial statements.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022, which is effective January 1, 2023 and contains provisions implementing a 15% minimum corporate income tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. While the Company is continuing to evaluate the impact of these provisions, at this time, they are not expected to have a material impact on the Company’s consolidated financial statements.

Income before income taxes consisted of the following:

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
U.S.	$	140,858		$	77,101		$	6,429
Foreign		(13,750	)		(9,200	)		(5,576	)
Total income before incomes taxes	$	127,108		$	67,901		$	853

The income tax provision consisted of the following:

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
Current
Federal	$	34,071		$	25,361		$	4,169
State		14,779			10,523			5,399
Foreign		1,777			160			652
Total current		50,627			36,044			10,220
Deferred
Federal		(8,069	)		(7,434	)		(1,308	)
State		(4,863	)		(1,627	)		(2,615	)
Foreign		(3,062	)		(531	)		(866	)
Total deferred		(15,994	)		(9,592	)		(4,789	)
Income tax provision	$	34,633		$	26,452		$	5,431

A reconciliation to the income tax provision from the amounts computed by applying the statutory U.S. federal income tax rate is as follows:

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
Income tax provision at statutory rate	$	26,693		$	14,259		$	179
State income taxes, net of federal income tax effect		8,588			6,748			1,188
Tax rate changes/ valuation of deferred tax items		—			586			1,353
162(m) limitation		1,766			1,325			1,179
Non-deductible expenses		30			174			1,786
Stock-based compensation		(545	)		(752	)		(38	)
Unrecognized tax benefits		1,215			174			(929	)
Tax impact for change in fair value of warrants		(3,024	)		1,596			237
Change in valuation allowance		1,429			1,435			924
Non-deductible transaction costs		—			1,078			19
Research and development credits		(517	)		(125	)		(121	)
Other		(1,002	)		(46	)		(346	)
Total income tax provision	$	34,633		$	26,452		$	5,431

Significant components of the Company’s deferred income tax assets and liabilities consist of the following at December 31:

($ in thousands)	2022			2021
Deferred tax assets:
Accrued expenses and other	$	6,255		$	7,334
Allowance for credit losses		9,108			4,927
Net operating loss carryforward		16,476			18,193
Interest expense limitation carryforward		5,108			5,935
Federal and state income tax credits		4,965			5,295
ASC 842 operating lease liabilities		10,986			9,578
R&D Section 174 capitalization		3,248			—
Stock compensation		1,995			—
Transaction costs		458			446
Other		2,026			1,042
Gross deferred tax assets		60,625			52,750
Valuation allowance		(5,263	)		(3,785	)
Deferred tax assets, net of valuation allowance		55,362			48,965
Deferred tax liabilities:
Intangible assets and transaction costs		(42,206	)		(62,116	)
Property and equipment		(15,265	)		(13,562	)
Financing costs		(2,392	)		(3,077	)
Prepaid assets		(2,269	)		(1,235	)
ASC 842 operating lease assets		(10,403	)		(9,104	)
481(a) adjustment, net		—			(857	)
Gross deferred tax liabilities		(72,535	)		(89,951	)
Total deferred tax liabilities, net	$	(17,173	)	$	(40,986	)

As of December 31, 2022 and 2021, the Company presented $4.0 million and $6.5 million, respectively, of deferred tax assets, net, to reflect U.S. entity deferred taxes within other non-current assets in the Company's consolidated balance sheets.

As of December 31, 2022, the Company has provided income taxes on the earnings of foreign subsidiaries, except to the extent such earnings are considered indefinitely reinvested. The amount of the unrecognized deferred tax liability related to these temporary differences is approximately $0.8 million.

In accordance with ASC 740, Income Taxes, deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets can be affected by, among other things, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, limitations on the use of acquired tax attributes due to an ownership change under IRC section 382, the length of statutory carryforward periods, the Company’s experience with utilizing operating losses and tax credit carryforwards by jurisdiction, and tax planning alternatives and strategies that may be available.

The Company performed an analysis of the reversal of the deferred tax assets and considered the overall business environment, historical earnings, the outlook for future years and the impact of limitations on the use of acquired tax attributes due to an ownership change under IRC section 382. The Company determined that it is more likely than not that the benefit from certain foreign net operating loss carryforwards will not be realized as of the years ended December 31, 2022 and 2021, and as such provided a valuation allowance of $5.3 million and $3.8 million, respectively. The valuation allowance could be adjusted in future periods if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present.

The net operating loss carryforwards represent $124.4 million and $158.7 million of federal, state and foreign net operating losses at December 31, 2022 and 2021, respectively. The federal net operating loss carryforward at December 31, 2022 consists of $24.0 million of losses that were generated after 2017 with no expiration date. The Company also has certain tax credits of $5.6 million and $6.4 million at December 31, 2022 and 2021, respectively, which if unused will begin to expire in 2025.

The following table summarizes the activity related to the Company’s unrecognized tax benefits as of December 31:

($ in thousands)	2022			2021
Balance at the beginning of the year	$	2,878		$	953
Increases/(decreases) related to current year tax positions		8,076			447
Increases/(decreases) related to prior year tax positions		(132	)		1,478
Expiration due to statute of limitations		(147	)		—
Balance at the end of the year	$	10,675		$	2,878

Included in the balance of unrecognized tax benefits as of December 31, 2022 were $2.6 million of tax benefits that, if recognized, would impact the effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. The Company recognized $0.5 million for fiscal year 2022 and less than $0.1 million for fiscal year 2021 in interest and penalties. The Company had accrued interest and penalties of $0.5 million and less than $0.1 million at December 31, 2022 and 2021, respectively. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based on technical merits, it is more likely than not that the tax position will be sustained under examination.

The Company is subject to examination by the Internal Revenue Service and taxing authorities in various jurisdictions. The Company files U.S. federal and various foreign income tax returns which are subject to examination by the taxing authorities in the respective jurisdictions, generally for three or four years after they are filed. The Company’s state income tax returns are generally no longer subject to income tax examination by tax authorities prior to 2018; however, the Company’s net operating loss carryforwards and research credit carryforwards arising prior to that year are subject to adjustment. The Company is currently under audit by various state tax jurisdictions for the years 2018 and 2019, however, no material adjustments are anticipated. The Company regularly assesses the likelihood of tax deficiencies in each of the tax jurisdictions and, accordingly, makes appropriate adjustments to the tax provision as deemed necessary.

XML

Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Stockholders' Equity

13.Stockholders’ Equity

The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of 261,000,000 shares of capital stock, consisting of (i) 260,000,000 shares of Class A Common Stock, and (ii) 1,000,000 shares of preferred stock, each at par value of $0.0001 per share. The outstanding shares of the Company’s common stock are duly authorized, validly issued, fully paid and non-assessable.

Share Repurchases and Retirement - 2022

On May 7, 2022, the Company’s Board of Directors authorized a share repurchase program for up to an aggregate amount of $125.0 million of its outstanding shares of Class A Common Stock over the next twelve months from time to time in open market, accelerated share repurchase (“ASR”) or privately negotiated transactions, each as permitted under applicable rules and regulations, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1 of the Securities Exchange Act of 1934 (the “Exchange Act”).

On May 12, 2022, the Company paid $50.0 million for an ASR and received an initial delivery of 2,739,726 shares of its Class A Common Stock in accordance with an ASR agreement with a third-party financial institution. The final settlement occurred on August 3, 2022, at which time, the Company received 445,086 additional shares calculated using a volume-weighted average price over the term of the ASR agreement. In addition, during the second and third quarters of 2022, the Company paid $6.9 million and repurchased 445,791 shares of its Class A Common

Stock through open market transactions. The Company’s Board of Directors authorized a second ASR during the third quarter of 2022 for the remaining availability under the share repurchase program. On August 19, 2022, the Company paid $68.1 million for a second ASR, and received an initial delivery of 3,300,000 shares of its Class A Common Stock in accordance with an ASR agreement with a third-party financial institution. The final settlement occurred on November 4, 2022, at which time, the Company received 943,361 additional shares calculated using a volume-weighted average price over the term of the ASR agreement. The Company accounted for each ASR transaction as a common stock repurchase and a forward contract indexed to its own common stock. The Company determined that the equity classification criteria was met for the forward contracts, therefore, it did not account for them as derivative instruments. The Company incurred $0.1 million of direct costs in connection with share repurchase transactions during fiscal year 2022, which it included in the cost of the shares acquired.

The Company paid a total of $125.0 million for shares repurchases and $0.1 million for direct costs during fiscal year 2022 and accounted for the transactions by deducting the par value from the common stock account, reducing $15.9 million from additional paid-in capital calculated using an average share price, and by increasing accumulated deficit for the remaining cost of $109.1 million.

In November 2022, the Board of Directors authorized a new share repurchase program for up to an aggregate amount of $100.0 million of the Company's outstanding shares of Class A common stock over an 18-month period in open market, ASR or privately negotiated transactions, each as permitted under applicable rules and regulations, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1 of the Exchange Act. The Company has not yet repurchased shares under this repurchase program.

Share Repurchase and Retirement - 2021

On August 9, 2021, the Company announced that its Board of Directors authorized a share repurchase program for up to an aggregate amount of $100 million of its outstanding shares of Class A Common Stock. On August 20, 2021, the Company repurchased and retired 6,849,315 shares of its Class A Common Stock from the Platinum Stockholder at a price per share of $14.60. The Company paid $100 million to fund the share repurchase using existing cash on hand. The Company accounted for the share repurchase and retirement under the cost method by deducting its par value from the common stock account, reducing $72.0 million from the additional paid-in-capital account using the share price when the stock was originally issued, and the remaining excess cost of $28.0 million by increasing the accumulated deficit account.

XML

Equity Incentive Plan

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plan

14.Equity Incentive Plan

In October 2018, the Company established the Verra Mobility 2018 Equity Incentive Plan (the “2018 Plan”) which provides for a variety of stock-based awards including restricted stock units (“RSUs”), performance share units (“PSUs”) and non-qualified stock options to employees and non-employee directors. The maximum number of shares of the Company’s common stock that may be subject to awards under the 2018 Plan was 10,864,000 as of December 31, 2022, subject to adjustment in accordance with the terms of the 2018 Plan. At December 31, 2022, the Company had an aggregate of 3,388,102 shares of common stock available for future grants under the 2018 Plan.

RSUs and PSUs

The Company’s RSUs consist of a right to receive shares on one or more vesting dates in the future. RSUs granted to employees vest ratably over four years from their individual award dates, subject to continued employment on the applicable vesting dates. RSUs granted to non-employee directors vest on the earlier of (a) the first anniversary of the vesting start date, or (b) the date immediately prior to the next annual stockholders meeting held by the Company occurring after the date of grant.

The Company grants PSUs to senior executives which consist of a right to receive shares at the end of a three-year period. PSUs are issued upon continued service along with the relative satisfaction of a market condition that measures the Company’s total stockholder return relative to a comparably calculated return for a peer group during the performance period. The level at which the performance condition is attained upon the completion of the

performance period determines the actual number of shares of the Class A Common Stock into which the PSUs will be converted. The conversion percentage ranges from 0% up to 150% of the target level.

The following table summarizes the activity of the Company’s RSUs and PSUs:

	RSUs					PSUs
	Shares (in thousands)			Weighted Average Grant Date Fair Value		Shares (in thousands)			Weighted Average Grant Date Fair Value
Balance at December 31, 2019		3,004		$	10.28		—		$	—
Granted		576		$	12.12		116		$	13.88
Vested		(986	)	$	10.35		—		$	—
Forfeited		(391	)	$	10.74		(10	)	$	13.88
Balance at December 31, 2020		2,203		$	10.64		106		$	13.88
Granted		736		$	14.12		154		$	16.28
Vested		(1,018	)	$	10.41		—		$	—
Forfeited		(229	)	$	13.40		(31	)	$	16.97
Balance at December 31, 2021		1,692		$	11.92		229		$	15.07
Granted		1,093		$	14.09		179		$	15.58
Vested		(1,030	)	$	11.10		—		$	—
Forfeited		(260	)	$	13.39		(94	)	$	15.17
Balance at December 31, 2022		1,495		$	13.82		314		$	15.33

The fair value of RSUs vested during fiscal years 2022, 2021 and 2020 was $11.4 million, $10.6 million and $10.2 million, respectively. There were no PSUs that vested to date. As of December 31, 2022, the Company had $15.4 million and $2.5 million of unrecognized stock-based compensation expense related to unvested RSUs and PSUs, respectively, which is expected to be recognized over a weighted average period of 2.8 years.

Stock Options

Stock options granted vest ratably over four years from their individual award dates, subject to continued employment on the applicable vesting dates, with a contractual term of ten years. The following table summarizes the activity of the Company’s stock options:

	Stock Options Outstanding
	Shares (in thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($ in thousands)
Balance at December 31, 2019		—			—
Granted		720		$	12.56
Exercised		—			—
Forfeited		(106	)	$	12.56
Balance at December 31, 2020		614		$	12.56
Granted		731		$	13.95
Exercised		(12	)	$	12.62		$	36
Forfeited		(170	)	$	14.29
Balance at December 31, 2021		1,163		$	13.18	8.7 years	$	2,636
Granted		846		$	13.97
Exercised		(103	)	$	12.98		$	348
Forfeited		(329	)	$	13.59
Balance at December 31, 2022		1,577		$	13.53	8.5 years	$	619
Exercisable at December 31, 2022		324		$	12.96	7.5 years	$	293
Unvested and expected to vest at December 31, 2022		1,253		$	13.68	8.7 years	$	326

The weighted average fair value of options granted in fiscal years 2020, 2021 and 2022 was $4.36, $6.47 and $6.66 per share, respectively. There were no stock options that vested in fiscal year 2020. There were 141,218 and 324,173 of stock options that vested in fiscal years 2021 and 2022 with a total fair value of $0.6 million and $1.6 million, respectively. The Company received approximately $0.2 million and $1.3 million related to stock options exercised during fiscal years 2021 and 2022, respectively. As of December 31, 2022, the Company had $6.0 million of unrecognized stock-based compensation expense related to unvested stock options which is expected to be recognized over a weighted average period of 2.7 years.

The following details the components of stock-based compensation for the respective periods:

	For the Year Ended December 31,
($ in thousands)	2022		2021		2020
Operating expenses	$	1,130	$	815	$	837
Selling, general and administrative expenses		15,533		12,969		11,752
Total stock-based compensation expense	$	16,663	$	13,784	$	12,589

Tax benefits attributable to stock-based compensation represented approximately $4.6 million, $4.6 million and $2.9 million, before limitations under section 162(m) of the Internal Revenue Code, during the years ended December 31, 2022, 2021 and 2020, respectively.

XML

Employee Benefit Plan

12 Months Ended

Dec. 31, 2022

Employee Benefit Plans [Abstract]

Employee Benefit Plan

15.Employee Benefit Plan

The Company has a 401(k) plan that covers U.S. employees who meet certain eligibility requirements. Covered employees may elect to have a portion of their compensation withheld up to the statutory limit. The 401(k) plan includes a company match that vests immediately. The Company made employer contributions of $2.5 million, $1.9 million and $1.7 million during the fiscal years ended December 31, 2022, 2021 and 2020, respectively.

The Company also makes superannuation contributions for eligible non-U.S. based employees in accordance with the employer contribution rate set by the applicable country. The expense related to these contributions was $1.7 million and $1.1 million during the fiscal years ended December 31, 2022 and 2021, respectively.

XML

Other Significant Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

Other Significant Transactions

16.Other Significant Transactions

Tax Receivable Agreement

At the closing of the Business Combination, the Company entered into the Tax Receivable Agreement (“Tax Receivable Agreement”) with the Platinum Stockholder. On August 3, 2022, the Platinum Stockholder sold and transferred to Lakeside Smart Holdco L.P.(“Lakeside”), all of its rights, remaining interests and obligations as of that date under the agreement. The Tax Receivable Agreement generally provides for the payment to Lakeside of 50.0% of the net cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the closing of the Business Combination as a result of the increased tax basis of certain acquired intangibles prior to the Business Combination. The Company generally retains the benefit of the remaining 50.0% of these cash savings. The Company estimated the potential maximum benefit to be paid will be approximately $70.0 million, and recorded an initial liability and corresponding charge to equity at the closing of the Business Combination.

At December 31, 2022, the Tax Receivable Agreement liability was approximately $55.9 million of which $5.0 million was the current portion and $50.9 million was the non-current portion, both of which are included in the respective tax receivable agreement liability line items on the consolidated balance sheets. The Company made a $5.1 million payment during the fourth quarter of 2022 related to the 2021 tax year.

The Company recorded tax benefits of $0.7 million and $1.0 million in fiscal years 2022 and 2021, respectively, as a result of lower estimated state tax rates due to changes in apportionment.

Earn-Out Agreement

Under the Merger Agreement, the Platinum Stockholder is entitled to receive additional shares of Class A Common Stock (the “Earn-Out Shares”) if the volume weighted average closing sale price of one share of Class A Common Stock on the Nasdaq exceeds certain thresholds for a period of at least 10 days out of 20 consecutive trading days at any time during the five-year period following the closing of the Business Combination (the “Common Stock Price”).

The Earn-Out Shares are issued by the Company to the Platinum Stockholder as follows:

Common Stock Price Thresholds	One-time Issuance of Shares
> $13.00 (a)	2,500,000
> $15.50 (a)	2,500,000
> $18.00	2,500,000
> $20.50	2,500,000

(a)The first and second tranches of Earn-Out Shares have been issued, as discussed below.

If any of the Common Stock Price thresholds above (each, a “Triggering Event”) are not achieved within the five-year period following the closing of the Business Combination, the Company will not be required to issue the Earn-Out Shares in respect of such Common Stock Price threshold. In no event shall the Platinum Stockholder be entitled to receive more than an aggregate of 10,000,000 Earn-Out Shares.

If, during the earn-out period, there is a change of control (as defined in the Merger Agreement) that will result in the holders of the Company's Class A Common Stock receiving a per share price equal to or in excess of the applicable Common Stock Price required in connection with any Triggering Event, then immediately prior to the consummation of such change of control: (a) any such Triggering Event that has not previously occurred shall be deemed to have occurred; and (b) the Company shall issue the applicable Earn-Out Shares to the cash consideration stockholders (as defined in the Merger Agreement) (in accordance with their respective pro rata cash share), and the recipients of the issued Earn-Out Shares shall be eligible to participate in such change of control.

The Company estimated the original fair value of the contingently issuable shares to be $73.15 million, of which $36.6 million remains contingently issuable as of December 31, 2022. The estimated value is not subject to future revisions during the five-year period discussed above. The Company used a Monte Carlo simulation option-pricing model to arrive at its original estimate. Each tranche was valued separately giving specific consideration to the tranche’s price target. The simulation considered volatility and risk-free rates utilizing a peer group based on a five-year term. This was initially recorded as a distribution to shareholders and was presented as common stock contingent consideration. Upon the occurrence of a Triggering Event, any issuable shares are transferred from common stock contingent consideration to common stock and additional paid-in capital accounts. Any contingently issuable shares not issued as a result of a Triggering Event not being attained by the end of the earn-out period will be canceled.

On April 26, 2019 and on January 27, 2020, the Triggering Events for the issuance of the first and second tranches of Earn-Out Shares occurred, as the volume weighted average closing sale price per share of the Company’s Class A Common Stock as of that date had been greater than $13.00 and $15.50, respectively, for 10 out of 20 consecutive trading days. These Triggering Events resulted in the issuance of an aggregate 5,000,000 shares of the Company’s Class A Common Stock to the Platinum Stockholder and an increase in the Company’s common stock and additional paid-in capital accounts of $36.6 million, with a corresponding decrease to the common stock contingent consideration account. At December 31, 2022, the potential future Earn-Out Shares issuable are between zero and 5.0 million.

Related Party Investment

Redflex Irish Investments Pty Ltd, a wholly owned indirect subsidiary of the Company, owns a 16% non-voting equity interest in Road Safety Operations Holdings Unlimited, which has a subsidiary, Road Safety Operations Holdings T/A Go Safe Ireland ("Go Safe"), which provides speed and traffic enforcement services and related equipment to its customers in Ireland. The carrying value of this equity investment was approximately $2.1 million and $3.7 million as of December 31, 2022 and 2021, respectively, and is presented within other non-current assets on the consolidated balance sheets. The Company is engaged as a vendor to supply equipment and services to Go Safe and related revenues earned were approximately $1.0 million and $0.5 million, and dividend income was $0.2 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively.

XML

Commitment and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

17.Commitments and Contingencies

The Company has $2.0 million of bank guarantees at December 31, 2022 required to support bids and contracts with certain international customers.

The Company has non-cancelable purchase commitments to certain vendors. The aggregate non-cancelable purchase commitments outstanding at December 31, 2022 were $26.0 million. The majority of these outstanding commitments are expected to be incurred in 2023 and approximately $3.9 million is expected to be incurred between 2024 and 2025.

The Company is subject to tax audits in the normal course of business and does not have material contingencies recorded related to such audits.

The Company accrues for claims and contingencies when losses become probable and reasonably estimable. As of the end of each applicable reporting period, the Company reviews each of its matters and, where it is probable that a liability has been or will be incurred, the Company accrues for all probable and reasonably estimable losses. Where the Company can reasonably estimate a range of loss it may incur regarding such a matter, the Company records an accrual for the amount within the range that constitutes its best estimate. If the Company can reasonably estimate a range but no amount within the range appears to be a better estimate than any other, the Company uses the amount that is the low end of such range.

Legal Proceedings

The Company is subject to legal and regulatory actions that arise from time to time in the ordinary course of business. The Company records a liability when it believes it is probable a loss will be incurred, and the amount of loss or range of loss can be reasonably estimated. The assessment as to whether a loss is probable, reasonably possible or remote, and as to whether a loss or a range of such loss is estimable, often involves significant judgment about future events. The Company has determined that resolution of pending matters is not probable to have a material adverse impact on its consolidated results of operations, cash flows, or financial position, and accordingly, no material contingency accruals are recorded. However, the outcome of litigation is inherently uncertain. As additional information becomes available, the Company reassesses the potential liability.

Brantley v. City of Gretna is a class action lawsuit filed in the 24th Judicial District Court of Jefferson Parish, Louisiana against the City of Gretna (“City”) and its safety camera vendor, Redflex Traffic Systems, Inc. in April 2016. The plaintiff class, which was certified on March 30, 2021, alleges that the City’s safety camera program was implemented and operated in violation of local ordinances and the state constitution, including that the City’s hearing process violated the plaintiffs’ due process rights for lack of a “neutral” arbiter of liability for traffic infractions. Plaintiffs seek recovery of traffic infraction fines paid. The City and Redflex Traffic Systems, Inc. appealed the trial court’s ruling granting class certification, which was denied and their petition for discretionary review of the certification ruling by the Louisiana Supreme Court was declined. The matter will return to the trial court for merits discovery. Based on the information available to the Company at present, it cannot reasonably estimate a range of loss for this action and, accordingly, it has not accrued any liability associated with this action.

XML

Segment Reporting

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment Reporting

18.Segment Reporting

The Company has three operating and reportable segments, Commercial Services, Government Solutions and Parking Solutions. Commercial Services offers toll and violation management solutions and title and registration services to commercial fleet vehicle owners, rental car companies and violation-issuing authorities. Government Solutions implements and administers traffic safety programs and products for municipalities and government agencies of all sizes. Parking Solutions provides an integrated suite of parking software and hardware solutions to its customers. The Company’s Chief Operating Decision Maker function (“CODM”) is comprised of the Company’s CEO and certain defined representatives of the Company’s executive management team. The Company’s CODM monitors operating performance, allocates resources and deploys capital based on these three segments.

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. The tables below refer to this measure as segment profit. The aforementioned items are not indicative of operating performance, and, as a result are not included in the measures that are reviewed by the CODM for the segments. Other income, net included in segment profit below consists primarily of credit card rebates earned on the prepayment of tolling transactions and gains or losses on foreign currency transactions, and excludes certain non-operating expenses inapplicable to segments.

The Company allocates certain corporate expenses to the three segments using several different factors depending on the item being allocated. These factors range from specific identification to headcount-based to allocate proportionately between the three segments. The corporate and other columns below include items that are designated by the CODM as corporate initiatives and are not included in segment profit.

During the third quarter of 2022, the Company changed its measure of segment profit to include
loss on disposal of assets, net, and to exclude transaction and transformation expenses that were previously included within the selling, general and administrative expenses and other income line items below. The comparable prior periods have been recast to conform to the revised presentation although the impact of this revision to previously reported segment profit was not material.

The Company does not disaggregate assets by segment other than equipment installed at customer sites and automobiles, which had carrying values of $58.3 million and $7.4 million, respectively, at December 31, 2022 and carrying values of $61.8 million and $2.7 million, respectively, at December 31, 2021 all of which relate mainly to the Government Solutions segment. Refer to Note 6, Goodwill and Intangible Assets for goodwill balances by segment.

The following tables set forth financial information by segment for the fiscal years ended December 31, 2022, 2021 and 2020:

	For the Year Ended December 31, 2022
	Commercial			Government			Parking			Corporate
($ in thousands)	Services			Solutions			Solutions			and Other			Total
Service revenue	$	325,971		$	307,639		$	61,608		$	—		$	695,218
Product sales		—			29,028			17,352			—			46,380
Total revenue		325,971			336,667			78,960			—			741,598
Cost of service revenue		2,869			2,016			11,445			—			16,330
Cost of product sales		—			17,436			13,496			—			30,932
Operating expenses		72,328			139,961			12,905			—			225,194
Selling, general and administrative expenses		56,105			61,235			27,104			—			144,444
Loss on disposal of assets, net		522			931			37			—			1,490
Other income, net		(14,387	)		(679	)		(266	)		—			(15,332	)
Segment profit	$	208,534		$	115,767		$	14,239		$	—		$	338,540
Segment profit	$	208,534		$	115,767		$	14,239		$	—		$	338,540
Depreciation and amortization		—			—			—			138,684			138,684
Transaction and other related expenses		—			—			—			3,381			3,381
Transformation expenses		—			—			—			1,113			1,113
Change in fair value of private placement warrants		—			—			—			(14,400	)		(14,400	)
Tax receivable agreement liability adjustment		—			—			—			(720	)		(720	)
Gain on interest rate swap		—			—			—			(996	)		(996	)
Stock-based compensation		—			—			—			16,663			16,663
Impairment on a privately-held equity investment		—			1,340			—			—			1,340
Gain on extinguishment of debt		—			—			—			(3,005	)		(3,005	)
Interest expense, net		—			—			—			69,372			69,372
Income before income taxes	$	208,534		$	114,427		$	14,239		$	(210,092	)	$	127,108

	For the Year Ended December 31, 2021
	Commercial			Government			Parking			Corporate
($ in thousands)	Services			Solutions			Solutions			and Other			Total
Service revenue	$	260,899		$	227,992		$	3,955		$	—		$	492,846
Product sales		—			55,163			2,581			—			57,744
Total revenue		260,899			283,155			6,536			—			550,590
Cost of service revenue		3,183			1,500			654			—			5,337
Cost of product sales		—			28,381			1,428			—			29,809
Operating expenses		65,718			96,284			553			—			162,555
Selling, general and administrative expenses		42,386			51,052			1,361			—			94,799
Loss on disposal of assets, net		—			48			—			—			48
Other income, net		(10,837	)		(2,040	)		(18	)		—			(12,895	)
Segment profit	$	160,449		$	107,930		$	2,558		$	—		$	270,937
Segment profit	$	160,449		$	107,930		$	2,558		$	—		$	270,937
Depreciation and amortization		—			—			—			116,753			116,753
Transaction and other related expenses		—			—			—			13,952			13,952
Transformation expenses		—			—			—			1,687			1,687
Change in fair value of private placement warrants		—			—			—			7,600			7,600
Tax receivable agreement liability adjustment		—			—			—			(1,016	)		(1,016	)
Stock-based compensation		—			—			—			13,784			13,784
Loss on extinguishment of debt		—			—			—			5,334			5,334
Interest expense, net		—			—			—			44,942			44,942
Income before income taxes	$	160,449		$	107,930		$	2,558		$	(203,036	)	$	67,901

	For the Year Ended December 31, 2020
	Commercial			Government			Corporate
($ in thousands)	Services			Solutions			and Other			Total
Service revenue	$	180,856		$	155,418		$	—		$	336,274
Product sales		—			57,319			—			57,319
Total revenue		180,856			212,737			—			393,593
Cost of service revenue		2,562			1,405			—			3,967
Cost of product sales		—			29,573			—			29,573
Operating expenses		52,505			62,387			—			114,892
Selling, general and administrative expenses		40,462			34,465			—			74,927
Loss on disposal of assets, net		16			258			—			274
Other income, net		(11,774	)		(111	)		—			(11,885	)
Segment profit	$	97,085		$	84,760		$	—		$	181,845
Segment profit	$	97,085		$	84,760		$	—		$	181,845
Depreciation and amortization		—			—			116,570			116,570
Transaction and other related expenses		—			—			1,895			1,895
Transformation expenses		—			—			1,090			1,090
Change in fair value of private placement warrants		—			—			1,133			1,133
Tax receivable agreement liability adjustment		—			—			6,850			6,850
Stock-based compensation		—			—			12,589			12,589
Interest expense, net		—			—			40,865			40,865
Income before income taxes	$	97,085		$	84,760		$	(180,992	)	$	853

The Company primarily operates within the United States, Australia, Canada, United Kingdom and in various other countries in Europe and Asia. Revenues earned from goods transferred to customers at a point in time were approximately $46.4 million, $57.7 million and $57.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. Property and equipment, net located in foreign countries was $17.3 million as of December 31, 2022, of which Canada represented $8.9 million and Australia represented $6.0 million. Property and equipment, net located in foreign countries was $14.8 million as of December 31, 2021, of which Canada represented $6.7 million and Australia represented $6.1 million.

The following table details the revenues from international operations for the respective periods:

	For the Year Ended December 31,
($ in thousands)	2022		2021		2020
Australia	$	34,356	$	13,948	$	—
Canada		32,413		6,874		—
United Kingdom		24,017		16,346		12,007
All other		3,532		2,809		1,295
Total international revenues	$	94,318	$	39,977	$	13,302

XML

Guarantor/Non-Guarantor Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Guarantor/Non-Guarantor Financial Information (Unaudited)

19.Guarantor/Non-Guarantor Financial Information (Unaudited)

VM Consolidated is the lead borrower of the 2021 Term Loan and Senior Notes. VM Consolidated is owned by the Company through a series of holding companies that ultimately end with the Company. VM Consolidated is wholly owned by Greenlight Acquisition Corporation, which is wholly owned by Greenlight Intermediate Holding Corporation, which is wholly owned by Greenlight Holding Corporation, which is wholly owned by Verra Mobility Holdings, LLC, which is wholly owned by Verra Mobility Corporation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, including transactions with the Company’s wholly owned guarantor subsidiaries and non-guarantor subsidiaries.

The following financial information presents the consolidated balance sheets as of December 31, 2022 and the related consolidated statements of operations and comprehensive income (loss) and the consolidated statements of cash flows for the year ended December 31, 2022 for the Company, the combined guarantor subsidiaries and the combined non-guarantor subsidiaries.

Verra Mobility Corporation and Subsidiaries

Consolidated Balance Sheets

at December 31, 2022

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	64,979	$	40,225	$	—		$	105,204
Restricted cash		—		3,863		48		—			3,911
Accounts receivable (net of allowance for credit losses of $15.9 million)		—		151,882		11,904		—			163,786
Unbilled receivables		—		25,342		5,440		—			30,782
Investment in subsidiary		61,811		145,370		—		(207,181	)		—
Inventory		—		1,976		17,331		—			19,307
Prepaid expenses and other current assets		—		32,869		6,735		—			39,604
Total current assets		61,811		426,281		81,683		(207,181	)		362,594
Installation and service parts, net		—		22,923		—		—			22,923
Property and equipment, net		—		92,434		17,341		—			109,775
Operating lease assets		—		30,939		6,654		—			37,593
Intangible assets, net		—		276,477		100,943		—			377,420
Goodwill		—		689,697		143,783		—			833,480
Due from affiliates		169,259		—		—		(169,259	)		—
Other non-current assets		—		9,657		2,827		—			12,484
Total assets	$	231,070	$	1,548,408	$	353,231	$	(376,440	)	$	1,756,269
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	—	$	58,574	$	21,295	$	—		$	79,869
Deferred revenue		—		20,353		10,811		—			31,164
Accrued liabilities		—		37,740		11,107		—			48,847
Tax receivable agreement liability, current portion		—		4,994		—		—			4,994
Current portion of long-term debt		—		21,935		—		—			21,935
Total current liabilities		—		143,596		43,213		—			186,809
Long-term debt, net of current portion		—		1,190,045		—		—			1,190,045
Operating lease liabilities, net of current portion		—		28,856		4,506		—			33,362
Tax receivable agreement liability, net of current portion		—		50,900		—		—			50,900
Private placement warrant liabilities		—		24,066		—		—			24,066
Asset retirement obligations		—		12,942		51		—			12,993
Due to affiliates		—		30,386		138,873		(169,259	)		—
Deferred tax liabilities, net		—		—		21,149		—			21,149
Other long-term liabilities		—		5,806		69		—			5,875
Total liabilities		—		1,486,597		207,861		(169,259	)		1,525,199
Total stockholders' equity		231,070		61,811		145,370		(207,181	)		231,070
Total liabilities and stockholders' equity	$	231,070	$	1,548,408	$	353,231	$	(376,440	)	$	1,756,269

Verra Mobility Corporation and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2022

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Service revenue	$	—		$	620,605		$	74,613		$	—		$	695,218
Product sales		—			26,675			19,705			—			46,380
Sales to affiliates		—			(1,788	)		1,788			—			—
Total revenue		—			645,492			96,106			—			741,598
Cost of service revenue		—			11,047			5,283			—			16,330
Cost of product sales		—			15,507			15,425			—			30,932
Cost of sales to affiliates		—			(10	)		10			—			—
Operating expenses		—			186,778			39,546			—			226,324
Selling, general and administrative expenses		—			139,565			23,568			—			163,133
Depreciation, amortization and (gain) loss on disposal of assets, net		—			119,617			20,557			—			140,174
Total costs and expenses		—			472,504			104,389			—			576,893
Income (loss) from operations		—			172,988			(8,283	)		—			164,705
Income from equity investment		(92,475	)		4,039			—			88,436			—
Interest expense, net		—			70,652			(1,280	)		—			69,372
Change in fair value of private placement warrants		—			(14,400	)		—			—			(14,400	)
Tax receivable agreement liability adjustment		—			(720	)		—			—			(720	)
Gain on interest rate swap		—			(996	)		—			—			(996	)
Gain on extinguishment of debt		—			(3,005	)		—			—			(3,005	)
Other income, net		—			(10,794	)		(1,860	)		—			(12,654	)
Total other (income) expenses		(92,475	)		44,776			(3,140	)		88,436			37,597
Income (loss) before income taxes		92,475			128,212			(5,143	)		(88,436	)		127,108
Income tax provision (benefit)		—			35,737			(1,104	)		—			34,633
Net income (loss)	$	92,475		$	92,475		$	(4,039	)	$	(88,436	)	$	92,475
Other comprehensive loss:
Change in foreign currency translation adjustment		—			—			(7,771	)		—			(7,771	)
Total comprehensive income (loss)	$	92,475		$	92,475		$	(11,810	)	$	(88,436	)	$	84,704

Verra Mobility Corporation and Subsidiaries

Consolidated Statements of Cash Flows

Year Ended December 31, 2022

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Cash Flows from Operating Activities:
Net income (loss)	$	92,475		$	92,475		$	(4,039	)	$	(88,436	)	$	92,475
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		—			118,127			20,557			—			138,684
Amortization of deferred financing costs and discounts		—			5,472			—			—			5,472
Change in fair value of private placement warrants		—			(14,400	)		—			—			(14,400	)
Tax receivable agreement liability adjustment		—			(720	)		—			—			(720	)
Gain on interest rate swap		—			(996	)		—			—			(996	)
Gain on extinguishment of debt		—			(3,005	)		—			—			(3,005	)
Credit loss expense		—			13,744			737			—			14,481
Deferred income taxes		—			(15,473	)		(1,882	)		—			(17,355	)
Stock-based compensation		—			16,663			—			—			16,663
Impairment on a privately-held equity investment		—			1,340			—			—			1,340
Other		—			1,654			—			—			1,654
Income from equity investment		(92,475	)		4,039			—			88,436			—
Changes in operating assets and liabilities:
Accounts receivable		—			(15,445	)		(2,240	)		—			(17,685	)
Unbilled receivables		—			(1,123	)		(813	)		—			(1,936	)
Inventory		—			(3,510	)		(6,800	)		—			(10,310	)
Prepaid expenses and other assets		—			529			3,777			—			4,306
Deferred revenue		—			3,433			1,158			—			4,591
Accounts payable and other current liabilities		—			2,408			4,105			—			6,513
Due to affiliates		—			7			(7	)		—			—
Other liabilities		—			(581	)		(854	)		—			(1,435	)
Net cash provided by operating activities		—			204,638			13,699			—			218,337
Cash Flows from Investing Activities:
Payment of contingent consideration		—			(647	)		—			—			(647	)
Purchases of installation and service parts and property and equipment		—			(39,447	)		(8,739	)		—			(48,186	)
Cash proceeds from the sale of assets		—			241			—			—			241
Net cash used in investing activities		—			(39,853	)		(8,739	)		—			(48,592	)
Cash Flows from Financing Activities:
Repayment on revolver		—			(25,000	)		—			—			(25,000	)
Repayment of long-term debt		—			(9,019	)		—			—			(9,019	)
Payment of debt issuance costs		—			(447	)		—			—			(447	)
Share repurchases and retirement		—			(125,071	)		—			—			(125,071	)
Proceeds from exercise of stock options		—			1,334			—			—			1,334
Payment of employee tax withholding related to RSUs vesting		—			(6,524	)		—			—			(6,524	)
Payment of contingent consideration		—			(205	)		—			—			(205	)
Net cash used in financing activities		—			(164,932	)		—			—			(164,932	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(130	)		—			(130	)

Net (decrease) increase in cash, cash equivalents and restricted cash		—		(147	)		4,830		—		4,683
Cash, cash equivalents and restricted cash - beginning of period		—		68,989			35,443		—		104,432
Cash, cash equivalents and restricted cash - end of period	$	—	$	68,842		$	40,273	$	—	$	109,115

Verra Mobility Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

Year Ended December 31, 2022

	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations		Consolidated
Supplemental cash flow information:
Interest paid	$	—	$	63,663	$	—	$	—	$	63,663
Income taxes paid, net of refunds		—		46,326		1,297		—		47,623
Supplemental non-cash investing and financing activities:
Additions related to asset retirement obligations, property and equipment, and other		—		946		—		—		946
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		—		10,421		—		—		10,421

XML

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All

intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions include those related to the fair values assigned to net assets acquired (including identifiable intangibles) in business combinations, allocating the transaction price for revenue recognition, inventory valuation, allowance for credit losses, fair value of the private placement warrant liabilities, fair value of the interest rate swap, self insurance liability, valuation allowance on deferred tax assets, uncertain tax positions, apportionment for state income taxes, the tax receivable agreement liability, fair value of privately-held securities, impairment assessments of goodwill, intangible assets and other long-lived assets, asset retirement obligations, contingent consideration and the recognition and measurement of loss contingencies.

Management believes that its estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less when acquired to be cash equivalents.

Restricted Cash

Restricted Cash

The Company collects cash on behalf of customers under certain contracts which it deposits daily into Company bank accounts and transfers regularly to customer bank accounts. Restricted cash represents customer cash collected but not yet remitted to the customer. Restricted cash is classified as a current asset and the corresponding liability is classified in current liabilities.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, accounts receivable and unbilled receivables. The Company limits cash and cash equivalents to highly rated financial institutions.

Significant customers are those which represent more than 10% of the Company’s total revenue or accounts receivable, net. Revenue from the single Government Solutions customer exceeding 10% of total revenue is presented below:

	For the Year Ended December 31,
	2022			2021			2020
City of New York Department of Transportation		19.5	%		26.6	%		31.3	%

The City of New York Department of Transportation (“NYCDOT”) represented 22% and 39% of total accounts receivable, net as of December 31, 2022 and 2021, respectively. There is no material reserve related to NYCDOT open receivables as amounts are deemed collectible based on current conditions and expectations. No other Government Solutions customer exceeded 10% of total accounts receivable, net as of any period presented.

Significant customer revenue concentrations generated through the Company’s Commercial Services partners as a percent of total revenue are presented below:

	For the Year Ended December 31,
	2022			2021			2020
Hertz Corporation		11.1	%		12.6	%		12.0	%
Avis Budget Group, Inc.		13.0	%		12.3	%		9.5	%
Enterprise Holdings, Inc.		9.3	%		11.4	%		11.3	%

The Avis Budget Group, Inc. was 10.2% of total accounts receivable, net as of December 31, 2022. No other Commercial Services customer exceeded 10% of total accounts receivable, net as of any period presented.

There were no significant customer concentrations that exceeded 10% of total revenue or accounts receivables, net for the Parking Solutions segment.

Allowance for Credit Losses

Allowance for Credit Losses

Accounts receivable and unbilled receivables are uncollateralized customer obligations arising from the sale of products or services. Accounts receivable and unbilled receivables have normal trade terms of less than one year and are initially stated at the amounts billed to the customers and subsequently measured at amortized cost net of allowance for credit losses. Unbilled receivables are recorded when revenues have been earned but have not been included on a customer invoice through the end of the current period.

The Company reviews historical credit losses and customer payment trends on receivables and develops loss rate estimates as of the balance sheet date, which includes adjustments for current and future expectations using probability-weighted assumptions about potential outcomes. Receivables are written off against the allowance for credit losses when it is probable that amounts will not be collected based on the terms of the customer contracts, and subsequent recoveries reverse the previous write-off and apply to the receivable in the period recovered. No interest or late fees are charged on delinquent accounts. The Company evaluates the adequacy of its allowance for expected credit losses by comparing its actual write-offs to its previously recorded estimates and adjusts appropriately.

The Company identified portfolio segments based on the type of business, industry in which the customer operates and historical credit loss patterns. The following presents the activity in the allowance for credit losses for the years ended December 31, 2021 and 2022, respectively:

($ in thousands)	Commercial Services (Driver-billed) (1)			Commercial Services (All other)			Government Solutions			Parking Solutions			Total
Balance at January 1, 2021	$	3,210		$	4,277		$	3,984		$	—		$	11,471
Credit loss expense (income)		11,040			(1,138	)		(314	)		—			9,588
Write-offs, net of recoveries		(8,853	)		(47	)		(21	)		—			(8,921	)
Balance at December 31, 2021	$	5,397		$	3,092		$	3,649		$	—		$	12,138
Credit loss expense		11,739			1,307			950		485				14,481
Write-offs, net of recoveries		(7,536	)		(2,822	)		(26	)		(328	)		(10,712	)
Balance at December 31, 2022	$	9,600		$	1,577		$	4,573		$	157		$	15,907

(1)Driver-billed consists of receivables from drivers of rental cars and fleet management companies for which the Company bills on behalf of its customers. Receivables not collected from drivers within a defined number of days are transferred to customers subject to applicable bad debt sharing agreements.

The Commercial Services (Driver-billed) portfolio segment’s credit loss estimate as of December 31, 2021 and 2022 increased compared to the prior years due to increased revenue that impacted the volume of transactions as a result of recovery from COVID-19. The Company adjusted down its estimate for credit loss as of December 31, 2021 for the Commercial Services (All other) portfolio segment to reflect improved economic conditions based on customer payment trends from the preceding twelve months. The credit loss estimate for this portfolio segment decreased as of December 31, 2022 mainly due to a $1.7 million write-off for a rental car customer who filed for bankruptcy.

Inventory

Inventory

Inventories consist of parts and electronic components used in the production of parking management related hardware sold to certain Parking Solutions customers and photo enforcement equipment sold to certain Government Solutions customers. Inventories are stated at cost on a first-in, first-out basis or net realizable value. The Company assesses the value of its inventory and writes down the cost to net realizable value upon evaluation of historical experience and assumptions regarding future usage, and any such write down establishes a new cost basis for the items. Finished goods were approximately $5.1 million and $2.5 million as of December 31, 2022 and 2021, respectively.

Installation and Service Parts

Installation and Service Parts

Installation and service parts consist of components used in the construction and maintenance of our photo enforcement systems. Installation and service parts are stated at cost and are reclassified to property and equipment upon initiation of construction. Installation and service parts used in repairs and maintenance are recorded as operating expenses.

Property and Equipment

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. All repairs and maintenance costs are expensed as incurred. Depreciation is recorded on a straight-line basis over the estimated useful lives of the related assets as follows:

Equipment installed at customer sites	3-7 years
Computer equipment	3-5 years
Furniture	3-10 years
Automobiles	3-7 years
Software	3-7 years
Leasehold improvements	Shorter of lease term or estimated useful life

Equipment installed at customer sites includes certain installation costs that qualify for capitalization. Software costs include certain internal and external costs associated with the development of software that are incurred during the application development stage. In addition, a modification or upgrade to existing software is capitalized only to the extent it results in additional functionality to existing software. Software maintenance and training costs are expensed as incurred. The Company capitalized internally developed software costs of $7.5 million, $3.0 million and $5.1 million during fiscal years 2022, 2021, and 2020 respectively.

Investment in Privately-held Securities

The Company holds an investment in privately-held equity securities which is recorded at cost and adjusted based on observable transactions for same or similar investments or for impairment. Investment gains and losses are recorded in other income, net.

Valuation of privately-held securities requires judgment due to the lack of readily available observable market data. The carrying value is not adjusted if there are no identified events that would indicate a need for upward or downward adjustments or changes in circumstances that may indicate impairment. In determining the estimated fair value of its investment, the Company utilizes the most recent data available. The Company assesses it investment for impairment quarterly using both qualitative and quantitative factors. If an investment is considered impaired, an impairment loss is recognized and a new carrying value is established for the investment.

The Company considered the existence of impairment indicators by evaluating the financial and liquidity position and as a result, a $1.3 million impairment during the year ended December 31, 2022 was recorded within other income, net on the consolidated statements of operations. There were no indicators of impairment during the year ended December 31, 2021. See Note 16, Other Significant Transactions for more information.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. Goodwill is assessed for impairment at least annually at the reporting unit level or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable. If, based on a qualitative analysis, it is determined more-likely-than-not that the fair value of the reporting

unit is less than its carrying amount, a one-step quantitative impairment test is performed. Reporting units are identified by assessing whether the components of the Company’s operating segments constitute businesses for which discrete financial information is available and if segment management regularly reviews the operating results of those components. Application of the goodwill impairment test requires judgment, including the identification of reporting units, the assignment of assets (including goodwill) to those reporting units and the determination of the fair value of each reporting unit. The date of the Company’s annual impairment analysis is October 1. The Company has four reporting units for the purposes of assessing potential impairment of goodwill.

In connection with the Company's 2022 assessment of goodwill impairment, it qualitatively concluded that the Commercial Services and Government Solutions North America reporting units did not have indicators of impairment. It did however, perform quantitative impairment reviews on the Parking Solutions and Government Solutions International reporting units, both of which were acquired in 2021. The fair values of these reporting units were determined in accordance with the discounted cash flow method using currently available financial forecasts. Based on the results of the Company's quantitative review, it concluded no adjustment to goodwill was necessary for fiscal year 2022. Moreover, the Company utilized earnings multiples to estimate the fair values of its Commercial Services and Government Solutions reporting units and corroborated the reasonableness of the reporting unit fair values by reconciling to the Company’s market capitalization as of October 1, 2022. The qualitative analyses performed as of October 1 for fiscal years 2021 and 2020 did not have indicators of impairment.

Intangible Assets

Intangible Assets

Intangible assets represent existing customer relationships, trademarks, developed technology (hardware and software) and non-compete agreements. Intangible assets are amortized over their respective estimated useful lives on a straight-line basis, which approximates the utilization of their expected future benefits. Amortization of intangible assets is included in depreciation, amortization and (gain) loss on disposal of assets, net in the consolidated statements of operations.

The Company annually evaluates the estimated remaining useful lives of its intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company reviews its long-lived assets (including intangible assets with finite useful lives and installation and service parts) for impairment whenever events or circumstances indicate that the carrying amount of an asset or an asset group may not be fully recoverable. The Company assesses recoverability by comparing the estimated undiscounted future cash flows expected to be generated by the asset or asset group with its carrying value. If the carrying value of the asset or asset group exceeds the estimated undiscounted future cash flows, an impairment loss is recognized for the difference between the estimated fair value and the carrying value.

The Company did not have any indicators of impairment related to long-lived assets for the years ended December 31, 2021 or 2020. The Company had $0.7 million of impairment related to certain photo enforcement programs that ended during the year ended December 31, 2022 within the depreciation, amortization and (gain) loss on disposal of assets, net line item on the consolidated statements of operations.

Self-Insurance

Self-Insurance

The Company is self-insured for medical costs and has stop-loss insurance policies to limit its exposure to individual and aggregate claims made. Liabilities for these programs are estimated based on outstanding claims and claims estimated to be incurred but not yet reported using historical loss experience. These estimates are subject to variability due to changes in trends of losses for outstanding claims and incurred but not reported claims, including external factors such as the number, and cost of, claims, benefit level changes and claim settlement patterns.

Warrants

Warrants

As of December 31, 2022, there were warrants outstanding to acquire 19,999,967 shares of the Company’s Class A Common Stock including: (i) 6,666,666 Private Placement Warrants and (ii) 13,333,301 warrants issued in connection with the IPO (the “Public Warrants” and, together with the Private Placement Warrants, the “Warrants”).

The Warrants entitle the registered holder to purchase one share of our Class A Common Stock at a price of $11.50 per share, subject to certain adjustments.

The Warrants became exercisable on November 16, 2018, 30 days following the completion of the Business Combination, and expire five years after that date, or earlier upon redemption or liquidation. The Company may redeem the outstanding Public Warrants at a price of $0.01 per warrant, if the last sale price of its Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third business day before it sends the notice of redemption to the Warrant holders. The Private Placement Warrants, however, are nonredeemable so long as they are held by Gores Sponsor II, LLC or its permitted transferees.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance under FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares, among other conditions for equity classification.

For warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The Company’s Public Warrants meet the criteria for equity classification and accordingly, are reported as a component of shareholders’ equity while the Company’s Private Placement Warrants do not meet the criteria for equity classification because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares and are instead classified as a liability. The fair value of the Private Placement Warrants is estimated at period-end using a Black-Scholes option pricing model. Shares issuable under the Warrants are considered for inclusion in the diluted share count in accordance with GAAP. As the shares issuable under the Warrants are issuable shares when exercised by the holders, they are included when computing diluted income (loss) per share, if such exercise is dilutive to income (loss) per share.

Interest Rate Swap

Interest Rate Swap

In December 2022, the Company entered into a cancellable interest rate swap agreement to hedge its exposure to interest rate fluctuations associated with the LIBOR portion of the variable interest rate on its 2021 Term Loan. Under the interest rate swap agreement, the Company pays a fixed rate and the counterparty pays a variable interest rate. The Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement with the counterparty which provides for the net settlement of all, or a specified group, of derivative transactions through a single payment. The notional amount on the interest rate swap is $675 million. The Company has the option to terminate the interest rate swap agreement starting in December 2023, and monthly thereafter until December 2025. The Company is treating the interest rate swap as an economic hedge for accounting purposes and any changes in the fair value of the derivative instrument (including accrued interest) are recorded in the consolidated statements of operations within the gain on interest rate swap line item. The Company recorded a $1.0 million gain on interest rate swap for the year ended December 31, 2022, which is recorded within operating activities on the consolidated statements of cash flows. The fair value of cash flows of approximately $1.0 million due within one year are presented in the accrued liabilities line item and the fair value of cash flows of $2.0 million received greater than one year are within the other non-current assets line item on the consolidated balance sheet as of December 31, 2022. See below for discussion on the fair value measurement of the interest rate swap, and Note 9, Long-term Debt, for additional information on the Company's mix of fixed and variable debt.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement, includes a single definition of fair value to be used for financial reporting purposes, provides a framework for applying this definition and for measuring fair value under GAAP, and

establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are summarized as follows:

Level 1 – Fair value is based on observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2 – Fair value is determined using quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs other than quoted prices that are directly or indirectly observable.

Level 3 – Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as a pricing model, discounted cash flow, or similar technique.

The carrying amounts reported in the Company’s consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the immediate to short-term maturity of these financial instruments. The estimated fair value of the Company’s long term debt was calculated based upon available market information. The carrying value and the estimated fair value are as follows:

	Level in	December 31, 2022				December 31, 2021
	Fair Value	Carrying		Estimated		Carrying		Estimated
($ in thousands)	Hierarchy	Amount		Fair Value		Amount		Fair Value
2021 Term Loan	2	$	866,365	$	883,891	$	871,467	$	895,125
Senior Notes	2		345,615		313,250		344,918		355,250
Revolver	2		—		—		24,435		25,000

The fair value of the private placement warrant liabilities is measured on a recurring basis and is estimated using the Black-Scholes option pricing model using significant unobservable inputs, primarily related to estimated volatility, and is therefore classified within level 3 of the fair value hierarchy. The key assumptions used were as follows:

	December 31, 2022			December 31, 2021
Stock price	$	13.83		$	15.43
Strike price	$	11.50		$	11.50
Volatility		44.0	%		48.0	%
Remaining life (in years)		0.8			1.8
Risk-free interest rate		4.74	%		0.66	%
Expected dividend yield		0.0	%		0.0	%
Estimated fair value	$	3.61		$	5.77

The Company is exposed to valuation risk on these Level 3 financial instruments. The risk of exposure is estimated using a sensitivity analysis of potential changes in the significant unobservable inputs, primarily the volatility input that is the most susceptible to valuation risk. A 5% increase to the volatility input at December 31, 2022 would increase the estimated fair value by $0.19 per unit. A 5% decrease to the volatility input at December 31, 2022 would decrease the estimated fair value by $0.18 per unit. The following summarizes the changes in fair value of private placement warrant liabilities included in net income (loss) for the respective periods:

($ in thousands)	December 31, 2022			December 31, 2021
Beginning balance	$	38,466		$	30,866
Change in fair value of private placement warrants		(14,400	)		7,600
Ending balance	$	24,066		$	38,466

The Company has an equity investment measured at cost which is only adjusted to fair value if there are identified events that would indicate a need for an upward or downward adjustment or changes in circumstances that may indicate impairment. The estimation of fair value requires the use of significant unobservable inputs, such as voting rights and obligations in the securities held, and is therefore classified within level 3 of the fair value hierarchy. The carrying value of the investment was $2.1 million and $3.7 million as of December 31, 2022 and 2021, respectively. The Company considered the existence of impairment indicators by evaluating the financial and liquidity position and as a result, remeasured the equity investment to fair value and recorded an impairment of $1.3 million

during the year ended December 31, 2022. There were no identified events that required a fair value adjustment as of December 31, 2021.

The fair value of the contingent consideration payable in connection with the NuPark acquisition was $1.5 million at December 13, 2021 acquisition date and was classified within level 3 of the fair value hierarchy. The valuation of the contingent consideration was measured using a discounted cash flow model and the significant unobservable inputs used in the measurement relate to forecasts of annualized revenue developed by the Company. During fiscal year 2022, the Company made payments to settle in full the contingent consideration payable to Passport Labs Inc, and there was no remaining payable as of December 31, 2022.

The recurring fair value measurement of the interest rate swap was valued based on observable inputs for similar assets and liabilities including swaption values and other observable inputs for interest rates and yield curves and is classified within level 2 of the fair value hierarchy.

Asset Retirement Obligation

Asset Retirement Obligation

The Company records obligations to perform certain retirement activities on camera and speed enforcement systems in the period that the related assets are placed in service. Asset retirement obligations are contractual obligations to restore property to its initial state. These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to operating expenses in the consolidated statements of operations. The associated asset retirement obligation is capitalized as part of the related asset’s carrying value and is depreciated over the asset’s estimated remaining useful life. When events and circumstances indicate that the original estimates used for asset retirement obligations may need revision, the Company reassesses the assumptions used and adjusts the liability appropriately.

Deferred Financing Costs

Deferred Financing Costs

Deferred financing costs consist of the costs incurred to obtain long-term financing, including the Company’s credit facilities (See Note 9). These costs, which are a reduction to long-term debt on the consolidated balance sheets, are amortized over the term of the related debt, using the effective interest method for term debt and the straight-line method for revolving credit facilities. Amortization of deferred financing costs for fiscal years 2022, 2021 and 2020 was $5.5 million, $5.2 million, and $5.4 million respectively.

Income Taxes

Income Taxes

The Company accounts for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the financial statements. Deferred tax assets generally represent items that can be used as a tax deduction or credit in tax returns in future years, while deferred tax liabilities generally represent items that generate a future tax liability for items where deductions have been accelerated for tax purposes. The Company provides a valuation allowance for deferred tax assets if it is more likely than not that some portion or all of the tax assets will not be realized. The Company calculates the valuation allowance in accordance with the authoritative guidance relating to income taxes, which requires an assessment of both positive and negative evidence regarding the realizability of these deferred tax assets when measuring the need for a valuation allowance. Significant judgment is required in determining any valuation allowance against deferred tax assets. The realization of deferred tax assets can be affected by, among other things, the nature, frequency, and severity of current and cumulative losses, forecasts of future profitability, the length of statutory carryforward periods, our experience with utilizing operating losses and tax credit carryforwards by jurisdiction, the reversal of existing taxable temporary differences and tax planning alternatives and strategies that may be available.

The Company’s effective tax rate is based on income, statutory tax rates, differences in the deductibility of certain expenses and inclusion of certain income items between financial statement and tax return purposes, and tax planning opportunities available to it in the various jurisdictions in which it operates. Under GAAP, if the Company determines that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, the Company recognizes the benefit. Tax code and regulations require certain items to be included in the tax return at different times than when those items are required to be recorded in the consolidated

financial statements. As a result, the effective tax rate reflected in its consolidated financial statements is different from that reported in its tax returns. Some of these differences are permanent, such as meals and entertainment expenses that are not fully deductible on the Company’s tax returns, and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities.

The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax provision or benefit.

Stock-based Compensation

Stock-based Compensation

In October 2018, the Company established the Verra Mobility 2018 Equity Incentive Plan (the “2018 Plan”) which provides for a variety of stock-based awards for issuance to employees and directors. The Company grants RSUs, stock options and performance share units (“PSUs”).

The Company recognizes the fair value of RSUs based on the Company’s common stock price at market close on the date of the grant. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options, and uses the Monte Carlo simulation model to determine the fair value of PSUs containing market conditions. The Black-Scholes model requires an assumption regarding the expected life of the stock option, which the Company estimated to be 6.25 years by applying the short-cut method permitted under SEC Staff Accounting Bulletin No. 110. The expected term of PSUs granted was three years, which matches the awards’ performance period. RSUs and stock options vest based on the continued service of the recipient. PSUs are issued upon continued service along with the relative satisfaction of a market condition that measures the Company’s total stockholder return relative to a comparably calculated return for a peer group during the performance period. In addition, the Black-Scholes and the Monte Carlo models require assumptions to be made regarding the expected volatility of the Company’s stock price. Stock price volatility is determined by averaging an implied volatility with the measure of historical volatility.

The following represents our weighted average assumptions for stock options and PSUs granted for the respective periods:

	For the Year Ended December 31,
	2022			2021			2020
Stock options
Weighted average expected volatility		45.1	%		47.7	%		34.5	%
Weighted average risk-free interest rate		2.94	%		0.94	%		0.73	%
PSUs
Weighted average expected volatility		48.0	%		50.4	%		34.0	%
Weighted average risk-free interest rate		2.78	%		0.33	%		0.61	%

Compensation expense for share-based awards is determined based on the grant date fair value. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the share-based award. The compensation expense for the PSUs is recognized over the requisite service period regardless of whether the market condition is satisfied. Forfeitures are accounted for as they occur. See Note 14, Equity Incentive Plan, for more information on the Company’s share-based awards.

Revenue Recognition and Deferred Revenue

Revenue Recognition

Nature of Goods and Services

The following is a description of principal activities, separated by reportable segments, from which the Company generates revenue:

Commercial Services. The Commercial Services segment offers toll and violation management solutions for the commercial fleet and rental car industries. The Company determined its performance obligation is a distinct stand-ready obligation, as there is an unspecified quantity of services provided that does not diminish, and the customer is being charged only when it uses the Company’s services, such as toll payment, title and registration, etc. Payment terms for contracts with commercial fleet and rental car companies vary, but are usually billed as services are performed. The Company recognizes revenue from these services over time.

Government Solutions. The Government Solutions segment principally generates revenue by providing complete, end-to-end speed, red-light, school bus stop arm, and bus lane enforcement solutions. Products, when sold, are typically sold together with the services in a bundle for a majority of customers. The average initial term of a contract is 3 to 5 years. Payment terms for contracts with government agencies vary depending on whether the consideration is fixed or variable. Payment terms for contracts with fixed consideration are usually based on equal installments over the duration of the contract. Payment terms for contracts with variable consideration are usually billed and collected as citations are issued or paid. In instances when the consideration expected from the customer is subject to variation, any variable consideration affecting revenue recognition is allocated to the distinct period (the monthly period) that it relates to.

For bundled offerings, the Company accounts for individual products and services separately if they are distinct – i.e., if a product or service is separately identifiable from other items in the bundle and if a customer can benefit from it as a stand-alone item. The consideration is allocated between separate products and services in a bundle based on their stand-alone selling prices (“SSP”). The Company estimates the SSP for its services based upon observable evidence, market conditions and other relevant inputs. If products are sold without the related services, no allocation is required.

•Product sales (sale of camera systems and installation) – the camera systems and related installation services are highly interdependent and interrelated and are accounted for as a single performance obligation. The revenues for this performance obligation are generally recognized at the point in time when the installation process is completed and the camera system is ready to perform the services as expected by the customer. Generally, this occurs at site acceptance or first citation.

•Service revenue – the Company has determined its performance obligation is to provide a complete end-to-end safety and enforcement solution. Promises include providing a system to capture images, processing images taken by the camera, forwarding eligible images to the police department and processing payments on behalf of the municipality. The Company has determined that certain of the promises to its customers are capable of being distinct as they are capable of providing some measure of benefit to the customer either on their own or together with other resources that are readily available to the customer. However, the Company has determined the promises to its customers do not meet the criterion of being distinct within the context of its contracts. The Company would not be able to fulfill its promises individually as its customers could not obtain the intended benefit from the contract without the Company fulfilling all promises. Accordingly, the Company concluded that each contract represents one service offering and is a single performance obligation to the customer. Further, the Company accounts for all the services as a single continuous service. The Company applied the series guidance for those services as it stands ready to deliver those services over the contract period. The Company recognizes revenue from services over time, as they are performed.

Parking Solutions. The T2 Systems business offers an integrated suite of parking software and hardware solutions to its customers. Revenue is derived primarily from the sale of software as a service (“SaaS”) and specialized hardware. For bundled offerings, the Company accounts for individual products and services separately if they are distinct and allocate the transaction price based on the relative SSP. For substantially all performance obligations except SaaS subscriptions, the Company is able to establish the SSP based on the observable prices of products or services sold separately in comparable transactions. The Company’s estimates of SSP are reassessed on a periodic basis or when facts and circumstances change. The Company is unable to establish the SSP for its software licenses based on observable prices given the same products are sold at a broad range of prices and a representative SSP is not discernible from past transactions or other observable evidence, as such, the SSP for software licenses included in a contract with multiple performance obligations is generally determined by applying a residual approach.

•The Company’s hosted parking management software products provide customers the ability to manage access to their parking lots and garages, issue physical or virtual parking permits and manage citations issued through enforcement devices. Revenue derived from these SaaS products is recognized ratably over the contractual service period beginning on the date the service is made available to the customer.

•Service revenue derived from the Company’s professional services are recognized over time as the services are performed. Revenues for fixed-price service projects are generally recognized over time applying input methods to estimate progress to completion.

•Revenue from product sales is recognized at a point in time when a customer takes control of the hardware, which typically occurs when the product is delivered to the customer and ownership is transferred to the customer.

Deferred Revenue

Deferred revenue represents amounts that have been invoiced in advance which are expected to be recognized as revenue in future periods, and it primarily relates to the Government Solutions and Parking Solutions customers. As of December 31, 2021 and 2022, the Company had approximately $8.9 million and $12.2 million of deferred revenue in the Government Solutions segment. The majority of the remaining performance obligations as of December 31, 2022 are expected to be completed and recognized in 2023 and $4.7 million is expected to be recognized between 2024 through 2027. As of December 31, 2021 and 2022, the Company had approximately $20.9 million and $21.2 million of deferred revenue in the Parking Solutions segment. The majority of the remaining performance obligations as of December 31, 2022 are expected to be completed and recognized as revenue in 2023 and $0.5 million is expected to be recognized in 2024.

Credit Card Rebates

Credit Card Rebates

The Company earns volume rebates from total spend on purchasing cards and recognizes the income in other income, net in the consolidated statements of operations. For the fiscal years ended December 31, 2022, 2021 and 2020, the Company recorded $14.5 million, $11.3 million, and $8.5 million respectively, related to rebates.

Advertising Costs

Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs for the fiscal years ended December 31, 2022, 2021 and 2020, were $1.0 million, $0.7 million and $0.8 million, respectively, and were included in selling, general, and administrative expenses in the consolidated statements of operations.

Foreign Currency

Foreign Currency

Assets and liabilities denominated in foreign currencies that differ from their functional currencies are re-measured at the exchange rate on the balance sheet date. The foreign currency effect of the re-measurement is included in other income, net in the consolidated statements of operations. The impact of foreign currency re-measurement was (losses) gains of $(0.7) million, $(0.2) million and $0.4 million for the fiscal years ended December 31, 2022, 2021 and 2020, respectively.

The assets and liabilities of our foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at current exchange rates while revenue and expenses are translated from functional currencies at average monthly exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive loss in stockholders’ equity.

Acquisitions

Acquisitions

The Company applies the acquisition method to account for business combinations. The Company allocates the fair value of the purchase price consideration to assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair value of the identifiable assets and liabilities is recorded as goodwill. The Company includes the results of operations of businesses acquired from the date of the respective acquisition. Any transaction costs associated with acquisitions are expensed as incurred.

Measurement period adjustments to preliminary purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of any changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed at the acquisition date. If applicable, we estimate the fair value of contingent consideration payments in determining the purchase price. Contingent consideration is adjusted to fair value in subsequent periods as an increase or decrease in selling, general and administrative expenses.

The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, and includes the use of independent valuation specialists to assist the Company in estimating fair values of acquired tangible and intangible assets. Although the Company believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from estimates.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Accounting Standards Adopted

In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another topic. It specifically addresses the measurement and recognition of the effect of a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option if it remains equity-classified after the modification or exchange. The Company adopted this standard as of January 1, 2022, which did not have an impact on its financial statements and related disclosures, as the Company had no transactions subject to the standard. If the Company were to have modifications or exchanges in the future, such guidance would apply.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The amendments require annual disclosures regarding the nature of any transactions with a government accounted for by applying a grant or contribution accounting model by analogy and the related accounting policy used, the effect of the assistance on the entity’s financial statements, and the significant terms and conditions of the transactions. The Company adopted the ASU as of January 1, 2022, which did not have a material impact on its financial statements or related disclosures.

Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. It provides optional expedients and exceptions for applying GAAP to contract modifications, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which extended the period of time stakeholders can utilize the reference rate reform relief guidance for two additional years until December 31, 2024.

Under the terms of the 2021 Term Loan (as defined below) discussed in Note 9, Long-term Debt, in the event there is a benchmark transition away from LIBOR, a benchmark replacement rate has been defined in the 2021 Term Loan agreement along with the mechanism for such a transition to take place. The Company does not anticipate this transition will have a material impact on its consolidated financial statements.

On June 30, 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual

restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also requires entities with investments in equity securities subject to contractual sale restrictions to disclose certain qualitative and quantitative information about such securities. The guidance is effective for fiscal years, including interim periods beginning after December 15, 2023. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements.

XML

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Summary of Concentration of Credit Risk

Revenue from the single Government Solutions customer exceeding 10% of total revenue is presented below:

	For the Year Ended December 31,
	2022			2021			2020
City of New York Department of Transportation		19.5	%		26.6	%		31.3	%

Significant customer revenue concentrations generated through the Company’s Commercial Services partners as a percent of total revenue are presented below:

	For the Year Ended December 31,
	2022			2021			2020
Hertz Corporation		11.1	%		12.6	%		12.0	%
Avis Budget Group, Inc.		13.0	%		12.3	%		9.5	%
Enterprise Holdings, Inc.		9.3	%		11.4	%		11.3	%

Summary of Accounts Receivable, Net and Activity in Allowance for Credit Losses by Portfolio Segment

The Company identified portfolio segments based on the type of business, industry in which the customer operates and historical credit loss patterns. The following presents the activity in the allowance for credit losses for the years ended December 31, 2021 and 2022, respectively:

($ in thousands)	Commercial Services (Driver-billed) (1)			Commercial Services (All other)			Government Solutions			Parking Solutions			Total
Balance at January 1, 2021	$	3,210		$	4,277		$	3,984		$	—		$	11,471
Credit loss expense (income)		11,040			(1,138	)		(314	)		—			9,588
Write-offs, net of recoveries		(8,853	)		(47	)		(21	)		—			(8,921	)
Balance at December 31, 2021	$	5,397		$	3,092		$	3,649		$	—		$	12,138
Credit loss expense		11,739			1,307			950		485				14,481
Write-offs, net of recoveries		(7,536	)		(2,822	)		(26	)		(328	)		(10,712	)
Balance at December 31, 2022	$	9,600		$	1,577		$	4,573		$	157		$	15,907

(1)Driver-billed consists of receivables from drivers of rental cars and fleet management companies for which the Company bills on behalf of its customers. Receivables not collected from drivers within a defined number of days are transferred to customers subject to applicable bad debt sharing agreements.

Estimated Useful Lives of Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. All repairs and maintenance costs are expensed as incurred. Depreciation is recorded on a straight-line basis over the estimated useful lives of the related assets as follows:

Equipment installed at customer sites	3-7 years
Computer equipment	3-5 years
Furniture	3-10 years
Automobiles	3-7 years
Software	3-7 years
Leasehold improvements	Shorter of lease term or estimated useful life

Carrying Value and Estimated Fair Value

The carrying value and the estimated fair value are as follows:

	Level in	December 31, 2022				December 31, 2021
	Fair Value	Carrying		Estimated		Carrying		Estimated
($ in thousands)	Hierarchy	Amount		Fair Value		Amount		Fair Value
2021 Term Loan	2	$	866,365	$	883,891	$	871,467	$	895,125
Senior Notes	2		345,615		313,250		344,918		355,250
Revolver	2		—		—		24,435		25,000

Key Assumptions Used for Measuring Fair Value of Private Placement Warrant Liabilities

The fair value of the private placement warrant liabilities is measured on a recurring basis and is estimated using the Black-Scholes option pricing model using significant unobservable inputs, primarily related to estimated volatility, and is therefore classified within level 3 of the fair value hierarchy. The key assumptions used were as follows:

	December 31, 2022			December 31, 2021
Stock price	$	13.83		$	15.43
Strike price	$	11.50		$	11.50
Volatility		44.0	%		48.0	%
Remaining life (in years)		0.8			1.8
Risk-free interest rate		4.74	%		0.66	%
Expected dividend yield		0.0	%		0.0	%
Estimated fair value	$	3.61		$	5.77

Summary of Changes in Private Placement Warrant Liabilities

The following summarizes the changes in fair value of private placement warrant liabilities included in net income (loss) for the respective periods:

($ in thousands)	December 31, 2022			December 31, 2021
Beginning balance	$	38,466		$	30,866
Change in fair value of private placement warrants		(14,400	)		7,600
Ending balance	$	24,066		$	38,466

Schedule of Weighted average assumptions for stock options and PSUs granted

The following represents our weighted average assumptions for stock options and PSUs granted for the respective periods:

	For the Year Ended December 31,
	2022			2021			2020
Stock options
Weighted average expected volatility		45.1	%		47.7	%		34.5	%
Weighted average risk-free interest rate		2.94	%		0.94	%		0.73	%
PSUs
Weighted average expected volatility		48.0	%		50.4	%		34.0	%
Weighted average risk-free interest rate		2.78	%		0.33	%		0.61	%

XML

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2022

Summary of Pro Forma Financial Information

The pro forma information includes adjustments to record the assets and liabilities associated with the Redflex and T2 Systems acquisitions at their respective fair values and to give effect to the financing of the acquisitions.

	For the Year Ended December 31,
($ in thousands)	2021		2020
Revenue	$	650,567	$	530,807
Net income (loss)		30,099		(58,695	)

Redflex Holdings Limited

Summary of Allocation of Preliminary Purchase Consideration

The final allocation of the purchase consideration is summarized as follows:

($ in thousands)
Assets acquired
Cash and cash equivalents	$	8,760
Restricted cash		2,163
Accounts receivable		6,870
Unbilled receivables		5,283
Property and equipment		29,809
Deferred tax assets		10,315
Other assets		19,247
Trademark		900
Customer relationships		25,900
Developed technology		18,200
Total assets acquired		127,447
Liabilities assumed
Accounts payable and accrued liabilities		31,936
Deferred revenue		8,048
Long-term debt		14,014
Other long-term liabilities		11,736
Total liabilities assumed		65,734
Goodwill		56,214
Total purchase consideration	$	117,927

T2 Systems Acquisition

Summary of Allocation of Preliminary Purchase Consideration

The final allocation of the purchase consideration is summarized as follows:

($ in thousands)
Assets acquired
Cash and cash equivalents	$	13,866
Restricted cash		228
Accounts receivable		9,673
Unbilled receivables		2,153
Inventory		7,467
Property and equipment		3,336
Prepaid and other assets (a)		7,031
Trademark		3,200
Customer relationships		164,300
Developed technology		19,300
Total assets acquired		230,554
Liabilities assumed
Accounts payable and accrued liabilities		10,379
Deferred revenue (a)		21,002
Deferred tax liabilities (a)		37,690
Other liabilities		4,228
Total liabilities assumed		73,299
Goodwill (a)		195,982
Total assets acquired and liabilities assumed	$	353,237

(a) The Company adjusted the fair values from the initial valuation as of December 31, 2021 to reflect new information obtained about facts and circumstances that existed as of the T2 Systems acquisition date. The measurement period adjustments include an increase of $0.6 million to the deferred tax liabilities, a $0.4 million decrease to deferred tax assets included within prepaid and other assets, a $0.2 million decrease in deferred revenue, and a net offsetting increase of $0.8 million to the goodwill line item. There was no impact to the consolidated statement of operations as a result of these adjustments.

XML

Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2022

Prepaid Expense and Other Assets, Current [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following at December 31:

($ in thousands)	2022		2021
Prepaid tolls	$	9,978	$	7,539
Prepaid services		9,171		8,643
Prepaid income taxes		4,629		5,324
Prepaid computer maintenance		5,492		3,742
Costs to fulfill a customer contract		3,193		3,364
Prepaid insurance		3,112		4,293
Deposits		2,057		6,742
Other		1,972		1,809
Total prepaid expenses and other current assets	$	39,604	$	41,456

XML

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net, consists of the following at December 31:

($ in thousands)	2022			2021
Equipment installed at customer sites	$	122,507		$	112,770
Software		30,288			24,207
Leasehold improvements		9,806			9,255
Computer equipment		20,274			14,215
Furniture		2,648			2,662
Automobiles		12,933			4,761
Construction in progress		19,357			12,169
Property and equipment		217,813			180,039
Less: accumulated depreciation		(108,038	)		(83,973	)
Property and equipment, net	$	109,775		$	96,066

XML

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill by Reportable Segment

The following table presents the changes in the carrying amount of goodwill by reportable segment:

	Commercial			Government			Parking
($ in thousands)	Services			Solutions			Solutions		Total
Balance at December 31, 2020	$	426,689		$	159,746		$	—	$	586,435
Acquisition of Redflex		—			56,214			—		56,214
Acquisition of T2 Systems		—			—			195,226		195,226
Acquisition of NuPark		—			—			3,160		3,160
Foreign currency translation adjustment		(1,608	)		(560	)		—		(2,168	)
Balance at December 31, 2021		425,081			215,400			198,386		838,867
Measurement period adjustment (a)		—			—			756		756
Foreign currency translation adjustment		(5,361	)		(782	)		—		(6,143	)
Balance at December 31, 2022	$	419,720		$	214,618		$	199,142	$	833,480

(a) This is a measurement period adjustment related to the T2 Systems acquisition, see Note 3. Acquisitions for additional information.

Schedule of Intangible Assets of Respective Period Ends

Intangible assets consist of the following as of the respective period-ends:

	Weighted	Weighted	At December 31, 2022
	Average	Average	Gross
	Remaining	Amortization	Carrying			Accumulated
($ in thousands)	Useful Life	Period	Amount			Amortization
Trademarks	0.4 years	3.7 years	$	36,151		$	32,233
Non-compete agreements	0.1 years	5.0 years		62,529			60,926
Customer relationships	5.5 years	9.3 years		557,570			227,102
Developed technology	1.2 years	5.8 years		201,548			160,117
Gross carrying value of intangible assets				857,798		$	480,378
Less: accumulated amortization				(480,378	)
Intangible assets, net			$	377,420

	Weighted	Weighted	At December 31, 2021
	Average	Average	Gross
	Remaining	Amortization	Carrying			Accumulated
($ in thousands)	Useful Life	Period	Amount			Amortization
Trademarks	0.5 years	3.7 years	$	36,225		$	31,429
Non-compete agreements	1.0 years	5.0 years		62,555			49,982
Customer relationships	6.5 years	9.3 years		561,767			167,255
Developed technology	2.2 years	5.8 years		202,768			127,350
Gross carrying value of intangible assets				863,315		$	376,016
Less: accumulated amortization				(376,016	)
Intangible assets, net			$	487,299

Estimated Amortization Expense in Future Years

Estimated amortization expense in future years is expected to be:

($ in thousands)
2023	$	77,347
2024		66,859
2025		64,161
2026		57,170
2027		28,353
Thereafter		83,530
Total	$	377,420

XML

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following at December 31:

($ in thousands)	2022		2021
Accrued salaries and wages	$	19,109	$	15,744
Current deferred tax liabilities		7,559		—
Current portion of operating lease liabilities		6,355		5,760
Accrued interest payable		4,459		4,209
Restricted cash due to customers		3,541		3,062
Payroll liabilities		2,136		1,876
Advanced deposits		1,029		2,554
Current portion of interest rate swap liability		977		—
Other		3,682		5,230
Total accrued liabilities	$	48,847	$	38,435

XML

Asset Retirement Obligation (Tables)

12 Months Ended

Dec. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

Schedule of Changes in Asset Retirement Obligation

The following summarizes the changes in the Company’s asset retirement obligations for the years ended December 31:

($ in thousands)	2022			2021
Asset retirement obligations, beginning balance	$	11,824		$	6,409
Liabilities incurred (a)		944			5,210
Accretion expense		445			308
Liabilities settled		(220	)		(103	)
Asset retirement obligations, ending balance	$	12,993		$	11,824

(a) For the year ended December 31, 2022, this includes approximately $0.4 million increase resulting from a change in estimate for the impact of inflation. For the year ended December 31, 2021, this includes $3.9 million of asset retirement obligations assumed as part of the Redflex acquisition in 2021, and a $1.2 million increase resulting from a change in estimate for the impact of inflation.

XML

Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Summary of the Company's Long-term Debt

The following table provides a summary of the Company’s long-term debt at December 31:

($ in thousands)	2022			2021
2021 Term Loan, due 2028	$	886,106		$	895,125
Senior Notes, due 2029		350,000			350,000
PPP Loan		—			2,933
Revolver		—			25,000
Less: original issue discounts		(5,637	)		(6,753	)
Less: unamortized deferred financing costs		(18,489	)		(22,551	)
Total long-term debt		1,211,980			1,243,754
Less: current portion of long-term debt		(21,935	)		(36,952	)
Total long-term debt, net of current portion	$	1,190,045		$	1,206,802

Scheduled Aggregate Future Principal and Interest Payments of Long-term Debt

The following table presents the aggregate principal and interest payments in future years on long-term debt as of December 31, 2022:

($ in thousands)	Principal		Interest (1)
2023	$	21,935	$	87,755
2024		9,019		87,056
2025		9,019		86,172
2026		9,019		85,474
2027		9,019		84,775
Thereafter		1,178,095		33,015
Total	$	1,236,106	$	464,247

(1) The variable interest rate in effect as of December 31, 2022 was used to calculate interest payments for the 2021 Term Loan.

Schedule of Consolidated First Lien Net Leverage Ratio and Applicable Prepayment Percentage

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, beginning with the year ending December 31, 2022), 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%

Summary of Senior Notes Redemption Prices Set Forth in Percentages by Year

On or after April 15, 2024, the Company 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
2024	102.750%
2025	101.375%
2026 and thereafter	100.000%

XML

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Summary of Operating Lease Assets and Liabilities

The following is a summary of the operating lease liabilities as of December 31:

($ in thousands)	2022		2021
Operating lease liabilities, net of current portion	$	33,362	$	34,984
Current portion		6,202		5,760
Total operating lease liabilities	$	39,564	$	40,744

Summary of Future Maturities of Operating Lease Liabilities

The following provides future maturities of operating lease liabilities as of December 31, 2022:

($ in thousands)
2023	$	8,107
2024		7,736
2025		5,329
2026		4,440
2027		3,341
Thereafter		21,033
Total minimum payments		49,986
Less: amount representing interest		(10,422	)
Total	$	39,564

XML

Net Income (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Schedule of Components of Basic and Diluted Net Income (Loss) Per Share

The components of basic and diluted net income (loss) per share are as follows:

	For the Year Ended December 31,
(In thousands, except per share data)	2022		2021		2020
Numerator:
Net income (loss)	$	92,475	$	41,449	$	(4,578	)
Denominator:
Weighted average shares - basic		152,848		159,983		161,632
Common stock equivalents		6,178		3,795		—
Weighted average shares - diluted		159,026		163,778		161,632
Net income (loss) per share - basic	$	0.61	$	0.26	$	(0.03	)
Net income (loss) per share - diluted	$	0.50	$	0.25	$	(0.03	)
Antidilutive shares excluded from diluted net income (loss) per share:
Contingently issuable shares (1)		5,000		5,000		5,000
Public warrants		—		—		13,333
Private placement warrants		—		6,667		6,667
Non-qualified stock options		1,149		1,018		614
Performance share units		157		130		106
Restricted stock units		742		432		2,203
Total antidilutive shares excluded		7,048		13,247		27,923

(1) Contingently issuable shares relate to the earn-out agreement as discussed in Note 16, Other Significant Transactions.

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income Before Income Taxes

Income before income taxes consisted of the following:

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
U.S.	$	140,858		$	77,101		$	6,429
Foreign		(13,750	)		(9,200	)		(5,576	)
Total income before incomes taxes	$	127,108		$	67,901		$	853

Schedule of Income Tax Provision

The income tax provision consisted of the following:

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
Current
Federal	$	34,071		$	25,361		$	4,169
State		14,779			10,523			5,399
Foreign		1,777			160			652
Total current		50,627			36,044			10,220
Deferred
Federal		(8,069	)		(7,434	)		(1,308	)
State		(4,863	)		(1,627	)		(2,615	)
Foreign		(3,062	)		(531	)		(866	)
Total deferred		(15,994	)		(9,592	)		(4,789	)
Income tax provision	$	34,633		$	26,452		$	5,431

Schedule of Reconciliation to Income Tax Provision

A reconciliation to the income tax provision from the amounts computed by applying the statutory U.S. federal income tax rate is as follows:

	For the Year Ended December 31,
($ in thousands)	2022			2021			2020
Income tax provision at statutory rate	$	26,693		$	14,259		$	179
State income taxes, net of federal income tax effect		8,588			6,748			1,188
Tax rate changes/ valuation of deferred tax items		—			586			1,353
162(m) limitation		1,766			1,325			1,179
Non-deductible expenses		30			174			1,786
Stock-based compensation		(545	)		(752	)		(38	)
Unrecognized tax benefits		1,215			174			(929	)
Tax impact for change in fair value of warrants		(3,024	)		1,596			237
Change in valuation allowance		1,429			1,435			924
Non-deductible transaction costs		—			1,078			19
Research and development credits		(517	)		(125	)		(121	)
Other		(1,002	)		(46	)		(346	)
Total income tax provision	$	34,633		$	26,452		$	5,431

Components of Deferred Income Tax Assets and Liabilities

Significant components of the Company’s deferred income tax assets and liabilities consist of the following at December 31:

($ in thousands)	2022			2021
Deferred tax assets:
Accrued expenses and other	$	6,255		$	7,334
Allowance for credit losses		9,108			4,927
Net operating loss carryforward		16,476			18,193
Interest expense limitation carryforward		5,108			5,935
Federal and state income tax credits		4,965			5,295
ASC 842 operating lease liabilities		10,986			9,578
R&D Section 174 capitalization		3,248			—
Stock compensation		1,995			—
Transaction costs		458			446
Other		2,026			1,042
Gross deferred tax assets		60,625			52,750
Valuation allowance		(5,263	)		(3,785	)
Deferred tax assets, net of valuation allowance		55,362			48,965
Deferred tax liabilities:
Intangible assets and transaction costs		(42,206	)		(62,116	)
Property and equipment		(15,265	)		(13,562	)
Financing costs		(2,392	)		(3,077	)
Prepaid assets		(2,269	)		(1,235	)
ASC 842 operating lease assets		(10,403	)		(9,104	)
481(a) adjustment, net		—			(857	)
Gross deferred tax liabilities		(72,535	)		(89,951	)
Total deferred tax liabilities, net	$	(17,173	)	$	(40,986	)

As of December 31, 2022 and 2021, the Company presented $4.0 million and $6.5 million, respectively, of deferred tax assets, net, to reflect U.S. entity deferred taxes within other non-current assets in the Company's consolidated balance sheets.

As of December 31, 2022, the Company has provided income taxes on the earnings of foreign subsidiaries, except to the extent such earnings are considered indefinitely reinvested. The amount of the unrecognized deferred tax liability related to these temporary differences is approximately $0.8 million.

Summary of Activity Related to Unrecognized Tax Benefits

The following table summarizes the activity related to the Company’s unrecognized tax benefits as of December 31:

($ in thousands)	2022			2021
Balance at the beginning of the year	$	2,878		$	953
Increases/(decreases) related to current year tax positions		8,076			447
Increases/(decreases) related to prior year tax positions		(132	)		1,478
Expiration due to statute of limitations		(147	)		—
Balance at the end of the year	$	10,675		$	2,878

XML

Equity Incentive Plan (Tables)

12 Months Ended

Dec. 31, 2022

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Activity of Stock Options

The following table summarizes the activity of the Company’s stock options:

	Stock Options Outstanding
	Shares (in thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($ in thousands)
Balance at December 31, 2019		—			—
Granted		720		$	12.56
Exercised		—			—
Forfeited		(106	)	$	12.56
Balance at December 31, 2020		614		$	12.56
Granted		731		$	13.95
Exercised		(12	)	$	12.62		$	36
Forfeited		(170	)	$	14.29
Balance at December 31, 2021		1,163		$	13.18	8.7 years	$	2,636
Granted		846		$	13.97
Exercised		(103	)	$	12.98		$	348
Forfeited		(329	)	$	13.59
Balance at December 31, 2022		1,577		$	13.53	8.5 years	$	619
Exercisable at December 31, 2022		324		$	12.96	7.5 years	$	293
Unvested and expected to vest at December 31, 2022		1,253		$	13.68	8.7 years	$	326

Schedule of Components of Stock Based Compensation Expense

The following details the components of stock-based compensation for the respective periods:

	For the Year Ended December 31,
($ in thousands)	2022		2021		2020
Operating expenses	$	1,130	$	815	$	837
Selling, general and administrative expenses		15,533		12,969		11,752
Total stock-based compensation expense	$	16,663	$	13,784	$	12,589

RSUs and PSUs

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Activity of RSUs and PSUs

The following table summarizes the activity of the Company’s RSUs and PSUs:

	RSUs					PSUs
	Shares (in thousands)			Weighted Average Grant Date Fair Value		Shares (in thousands)			Weighted Average Grant Date Fair Value
Balance at December 31, 2019		3,004		$	10.28		—		$	—
Granted		576		$	12.12		116		$	13.88
Vested		(986	)	$	10.35		—		$	—
Forfeited		(391	)	$	10.74		(10	)	$	13.88
Balance at December 31, 2020		2,203		$	10.64		106		$	13.88
Granted		736		$	14.12		154		$	16.28
Vested		(1,018	)	$	10.41		—		$	—
Forfeited		(229	)	$	13.40		(31	)	$	16.97
Balance at December 31, 2021		1,692		$	11.92		229		$	15.07
Granted		1,093		$	14.09		179		$	15.58
Vested		(1,030	)	$	11.10		—		$	—
Forfeited		(260	)	$	13.39		(94	)	$	15.17
Balance at December 31, 2022		1,495		$	13.82		314		$	15.33

XML

Other Significant Transactions (Tables)

12 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

Summary of Earn Out Shares Issued by Company to Platinum Stockholder

The Earn-Out Shares are issued by the Company to the Platinum Stockholder as follows:

Common Stock Price Thresholds	One-time Issuance of Shares
> $13.00 (a)	2,500,000
> $15.50 (a)	2,500,000
> $18.00	2,500,000
> $20.50	2,500,000

(a)The first and second tranches of Earn-Out Shares have been issued, as discussed below.

XML

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Financial Information by Segment

The following tables set forth financial information by segment for the fiscal years ended December 31, 2022, 2021 and 2020:

	For the Year Ended December 31, 2022
	Commercial			Government			Parking			Corporate
($ in thousands)	Services			Solutions			Solutions			and Other			Total
Service revenue	$	325,971		$	307,639		$	61,608		$	—		$	695,218
Product sales		—			29,028			17,352			—			46,380
Total revenue		325,971			336,667			78,960			—			741,598
Cost of service revenue		2,869			2,016			11,445			—			16,330
Cost of product sales		—			17,436			13,496			—			30,932
Operating expenses		72,328			139,961			12,905			—			225,194
Selling, general and administrative expenses		56,105			61,235			27,104			—			144,444
Loss on disposal of assets, net		522			931			37			—			1,490
Other income, net		(14,387	)		(679	)		(266	)		—			(15,332	)
Segment profit	$	208,534		$	115,767		$	14,239		$	—		$	338,540
Segment profit	$	208,534		$	115,767		$	14,239		$	—		$	338,540
Depreciation and amortization		—			—			—			138,684			138,684
Transaction and other related expenses		—			—			—			3,381			3,381
Transformation expenses		—			—			—			1,113			1,113
Change in fair value of private placement warrants		—			—			—			(14,400	)		(14,400	)
Tax receivable agreement liability adjustment		—			—			—			(720	)		(720	)
Gain on interest rate swap		—			—			—			(996	)		(996	)
Stock-based compensation		—			—			—			16,663			16,663
Impairment on a privately-held equity investment		—			1,340			—			—			1,340
Gain on extinguishment of debt		—			—			—			(3,005	)		(3,005	)
Interest expense, net		—			—			—			69,372			69,372
Income before income taxes	$	208,534		$	114,427		$	14,239		$	(210,092	)	$	127,108

	For the Year Ended December 31, 2021
	Commercial			Government			Parking			Corporate
($ in thousands)	Services			Solutions			Solutions			and Other			Total
Service revenue	$	260,899		$	227,992		$	3,955		$	—		$	492,846
Product sales		—			55,163			2,581			—			57,744
Total revenue		260,899			283,155			6,536			—			550,590
Cost of service revenue		3,183			1,500			654			—			5,337
Cost of product sales		—			28,381			1,428			—			29,809
Operating expenses		65,718			96,284			553			—			162,555
Selling, general and administrative expenses		42,386			51,052			1,361			—			94,799
Loss on disposal of assets, net		—			48			—			—			48
Other income, net		(10,837	)		(2,040	)		(18	)		—			(12,895	)
Segment profit	$	160,449		$	107,930		$	2,558		$	—		$	270,937
Segment profit	$	160,449		$	107,930		$	2,558		$	—		$	270,937
Depreciation and amortization		—			—			—			116,753			116,753
Transaction and other related expenses		—			—			—			13,952			13,952
Transformation expenses		—			—			—			1,687			1,687
Change in fair value of private placement warrants		—			—			—			7,600			7,600
Tax receivable agreement liability adjustment		—			—			—			(1,016	)		(1,016	)
Stock-based compensation		—			—			—			13,784			13,784
Loss on extinguishment of debt		—			—			—			5,334			5,334
Interest expense, net		—			—			—			44,942			44,942
Income before income taxes	$	160,449		$	107,930		$	2,558		$	(203,036	)	$	67,901

	For the Year Ended December 31, 2020
	Commercial			Government			Corporate
($ in thousands)	Services			Solutions			and Other			Total
Service revenue	$	180,856		$	155,418		$	—		$	336,274
Product sales		—			57,319			—			57,319
Total revenue		180,856			212,737			—			393,593
Cost of service revenue		2,562			1,405			—			3,967
Cost of product sales		—			29,573			—			29,573
Operating expenses		52,505			62,387			—			114,892
Selling, general and administrative expenses		40,462			34,465			—			74,927
Loss on disposal of assets, net		16			258			—			274
Other income, net		(11,774	)		(111	)		—			(11,885	)
Segment profit	$	97,085		$	84,760		$	—		$	181,845
Segment profit	$	97,085		$	84,760		$	—		$	181,845
Depreciation and amortization		—			—			116,570			116,570
Transaction and other related expenses		—			—			1,895			1,895
Transformation expenses		—			—			1,090			1,090
Change in fair value of private placement warrants		—			—			1,133			1,133
Tax receivable agreement liability adjustment		—			—			6,850			6,850
Stock-based compensation		—			—			12,589			12,589
Interest expense, net		—			—			40,865			40,865
Income before income taxes	$	97,085		$	84,760		$	(180,992	)	$	853

Revenue from international customers

The following table details the revenues from international operations for the respective periods:

	For the Year Ended December 31,
($ in thousands)	2022		2021		2020
Australia	$	34,356	$	13,948	$	—
Canada		32,413		6,874		—
United Kingdom		24,017		16,346		12,007
All other		3,532		2,809		1,295
Total international revenues	$	94,318	$	39,977	$	13,302

XML

Guarantor/Non-Guarantor Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Summary of Consolidated Balance Sheets

Verra Mobility Corporation and Subsidiaries

Consolidated Balance Sheets

at December 31, 2022

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	64,979	$	40,225	$	—		$	105,204
Restricted cash		—		3,863		48		—			3,911
Accounts receivable (net of allowance for credit losses of $15.9 million)		—		151,882		11,904		—			163,786
Unbilled receivables		—		25,342		5,440		—			30,782
Investment in subsidiary		61,811		145,370		—		(207,181	)		—
Inventory		—		1,976		17,331		—			19,307
Prepaid expenses and other current assets		—		32,869		6,735		—			39,604
Total current assets		61,811		426,281		81,683		(207,181	)		362,594
Installation and service parts, net		—		22,923		—		—			22,923
Property and equipment, net		—		92,434		17,341		—			109,775
Operating lease assets		—		30,939		6,654		—			37,593
Intangible assets, net		—		276,477		100,943		—			377,420
Goodwill		—		689,697		143,783		—			833,480
Due from affiliates		169,259		—		—		(169,259	)		—
Other non-current assets		—		9,657		2,827		—			12,484
Total assets	$	231,070	$	1,548,408	$	353,231	$	(376,440	)	$	1,756,269
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	—	$	58,574	$	21,295	$	—		$	79,869
Deferred revenue		—		20,353		10,811		—			31,164
Accrued liabilities		—		37,740		11,107		—			48,847
Tax receivable agreement liability, current portion		—		4,994		—		—			4,994
Current portion of long-term debt		—		21,935		—		—			21,935
Total current liabilities		—		143,596		43,213		—			186,809
Long-term debt, net of current portion		—		1,190,045		—		—			1,190,045
Operating lease liabilities, net of current portion		—		28,856		4,506		—			33,362
Tax receivable agreement liability, net of current portion		—		50,900		—		—			50,900
Private placement warrant liabilities		—		24,066		—		—			24,066
Asset retirement obligations		—		12,942		51		—			12,993
Due to affiliates		—		30,386		138,873		(169,259	)		—
Deferred tax liabilities, net		—		—		21,149		—			21,149
Other long-term liabilities		—		5,806		69		—			5,875
Total liabilities		—		1,486,597		207,861		(169,259	)		1,525,199
Total stockholders' equity		231,070		61,811		145,370		(207,181	)		231,070
Total liabilities and stockholders' equity	$	231,070	$	1,548,408	$	353,231	$	(376,440	)	$	1,756,269

Summary of Consolidated Statements of Operations and Comprehensive Loss

Verra Mobility Corporation and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2022

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Service revenue	$	—		$	620,605		$	74,613		$	—		$	695,218
Product sales		—			26,675			19,705			—			46,380
Sales to affiliates		—			(1,788	)		1,788			—			—
Total revenue		—			645,492			96,106			—			741,598
Cost of service revenue		—			11,047			5,283			—			16,330
Cost of product sales		—			15,507			15,425			—			30,932
Cost of sales to affiliates		—			(10	)		10			—			—
Operating expenses		—			186,778			39,546			—			226,324
Selling, general and administrative expenses		—			139,565			23,568			—			163,133
Depreciation, amortization and (gain) loss on disposal of assets, net		—			119,617			20,557			—			140,174
Total costs and expenses		—			472,504			104,389			—			576,893
Income (loss) from operations		—			172,988			(8,283	)		—			164,705
Income from equity investment		(92,475	)		4,039			—			88,436			—
Interest expense, net		—			70,652			(1,280	)		—			69,372
Change in fair value of private placement warrants		—			(14,400	)		—			—			(14,400	)
Tax receivable agreement liability adjustment		—			(720	)		—			—			(720	)
Gain on interest rate swap		—			(996	)		—			—			(996	)
Gain on extinguishment of debt		—			(3,005	)		—			—			(3,005	)
Other income, net		—			(10,794	)		(1,860	)		—			(12,654	)
Total other (income) expenses		(92,475	)		44,776			(3,140	)		88,436			37,597
Income (loss) before income taxes		92,475			128,212			(5,143	)		(88,436	)		127,108
Income tax provision (benefit)		—			35,737			(1,104	)		—			34,633
Net income (loss)	$	92,475		$	92,475		$	(4,039	)	$	(88,436	)	$	92,475
Other comprehensive loss:
Change in foreign currency translation adjustment		—			—			(7,771	)		—			(7,771	)
Total comprehensive income (loss)	$	92,475		$	92,475		$	(11,810	)	$	(88,436	)	$	84,704

Summary of Consolidated Statements of Cash Flows

Verra Mobility Corporation and Subsidiaries

Consolidated Statements of Cash Flows

Year Ended December 31, 2022

($ in thousands)	Verra Mobility Corporation (Ultimate Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Cash Flows from Operating Activities:
Net income (loss)	$	92,475		$	92,475		$	(4,039	)	$	(88,436	)	$	92,475
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		—			118,127			20,557			—			138,684
Amortization of deferred financing costs and discounts		—			5,472			—			—			5,472
Change in fair value of private placement warrants		—			(14,400	)		—			—			(14,400	)
Tax receivable agreement liability adjustment		—			(720	)		—			—			(720	)
Gain on interest rate swap		—			(996	)		—			—			(996	)
Gain on extinguishment of debt		—			(3,005	)		—			—			(3,005	)
Credit loss expense		—			13,744			737			—			14,481
Deferred income taxes		—			(15,473	)		(1,882	)		—			(17,355	)
Stock-based compensation		—			16,663			—			—			16,663
Impairment on a privately-held equity investment		—			1,340			—			—			1,340
Other		—			1,654			—			—			1,654
Income from equity investment		(92,475	)		4,039			—			88,436			—
Changes in operating assets and liabilities:
Accounts receivable		—			(15,445	)		(2,240	)		—			(17,685	)
Unbilled receivables		—			(1,123	)		(813	)		—			(1,936	)
Inventory		—			(3,510	)		(6,800	)		—			(10,310	)
Prepaid expenses and other assets		—			529			3,777			—			4,306
Deferred revenue		—			3,433			1,158			—			4,591
Accounts payable and other current liabilities		—			2,408			4,105			—			6,513
Due to affiliates		—			7			(7	)		—			—
Other liabilities		—			(581	)		(854	)		—			(1,435	)
Net cash provided by operating activities		—			204,638			13,699			—			218,337
Cash Flows from Investing Activities:
Payment of contingent consideration		—			(647	)		—			—			(647	)
Purchases of installation and service parts and property and equipment		—			(39,447	)		(8,739	)		—			(48,186	)
Cash proceeds from the sale of assets		—			241			—			—			241
Net cash used in investing activities		—			(39,853	)		(8,739	)		—			(48,592	)
Cash Flows from Financing Activities:
Repayment on revolver		—			(25,000	)		—			—			(25,000	)
Repayment of long-term debt		—			(9,019	)		—			—			(9,019	)
Payment of debt issuance costs		—			(447	)		—			—			(447	)
Share repurchases and retirement		—			(125,071	)		—			—			(125,071	)
Proceeds from exercise of stock options		—			1,334			—			—			1,334
Payment of employee tax withholding related to RSUs vesting		—			(6,524	)		—			—			(6,524	)
Payment of contingent consideration		—			(205	)		—			—			(205	)
Net cash used in financing activities		—			(164,932	)		—			—			(164,932	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(130	)		—			(130	)

Net (decrease) increase in cash, cash equivalents and restricted cash		—		(147	)		4,830		—		4,683
Cash, cash equivalents and restricted cash - beginning of period		—		68,989			35,443		—		104,432
Cash, cash equivalents and restricted cash - end of period	$	—	$	68,842		$	40,273	$	—	$	109,115

Verra Mobility Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

Year Ended December 31, 2022

	Verra Mobility Corporation (Ultimate Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations		Consolidated
Supplemental cash flow information:
Interest paid	$	—	$	63,663	$	—	$	—	$	63,663
Income taxes paid, net of refunds		—		46,326		1,297		—		47,623
Supplemental non-cash investing and financing activities:
Additions related to asset retirement obligations, property and equipment, and other		—		946		—		—		946
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		—		10,421		—		—		10,421

XML

Description of Business - Additional Information (Details)	12 Months Ended
	Dec. 31, 2022 Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	3

XML

Significant Accounting Policies - Additional Information (Details)	12 Months Ended
	Dec. 31, 2022 USD ($) yr Customer TradingDay $ / shares shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 13, 2021 USD ($)
Summary Of Significant Accounting Principles And Policies [Line Items]
Capitalization of internally developed software costs	$ 7,500,000	$ 3,000,000.0	$ 5,100,000
Impairment on privately-held equity investment	1,340,000	0
Impairment of property and equipment	0		0
Gain on interest rate swap	996,000
Contingent consideration	0			$ 1,500,000
Investment costs	2,100,000	3,700,000
Amortization of deferred financing costs	5,500,000	5,200,000	5,400,000
Current deferred tax liabilities	31,164,000
Inventory
Summary Of Significant Accounting Principles And Policies [Line Items]
Inventory finished goods	5,100,000	2,500,000
Interest Rate Swap
Summary Of Significant Accounting Principles And Policies [Line Items]
Notional amount	675,000,000
Gain on interest rate swap	1,000,000.0
Interest Rate Swap | Due Within One Year
Summary Of Significant Accounting Principles And Policies [Line Items]
Fair value of derivative	1,000,000.0
Interest Rate Swap | Greater than One Year
Summary Of Significant Accounting Principles And Policies [Line Items]
Fair value of derivative	2,000,000.0
Photo Enforcement Program
Summary Of Significant Accounting Principles And Policies [Line Items]
Impairment of property and equipment	700,000
Other Income
Summary Of Significant Accounting Principles And Policies [Line Items]
Benefit on credit card rebates	14,500,000	11,300,000	8,500,000
Foreign currency effect of re-measurement of assets and liabilities gains (losses)	(700,000)	(200,000)	400,000
Selling, General and Administrative Expenses
Summary Of Significant Accounting Principles And Policies [Line Items]
Advertising costs	$ 1,000,000.0	700,000	$ 800,000
PSU
Summary Of Significant Accounting Principles And Policies [Line Items]
Share-based payment award, fair value assumptions, method used	Monte Carlo simulation model
Stock Options
Summary Of Significant Accounting Principles And Policies [Line Items]
Share-based payment award, fair value assumptions, method used	Black-Scholes option pricing model
Expected Term | Stock Options
Summary Of Significant Accounting Principles And Policies [Line Items]
Alternative investment, measurement input | yr	6.25
Private Placement Warrant Liabilities | 5% Increase in Measurement Input Price Volatility | Level 3
Summary Of Significant Accounting Principles And Policies [Line Items]
Per unit increase in estimated fair value measurement due to changes in volatility rate	0.0019
Private Placement Warrant Liabilities | 5% Decrease in Measurement Input Price Volatility | Level 3
Summary Of Significant Accounting Principles And Policies [Line Items]
Per unit decrease in estimated fair value measurement due to changes in volatility rate	0.0018
Warrants
Summary Of Significant Accounting Principles And Policies [Line Items]
Warrants exercisable date	Nov. 16, 2018
Warrant exercisable term if business combination Is completed	30 days
Warrant expiration term	5 years
Outstanding warrants to be redeemed | $ / shares	$ 0.01
Class A common stock
Summary Of Significant Accounting Principles And Policies [Line Items]
Warrants outstanding to acquire shares | shares	19,999,967
Class A common stock | Private Placement
Summary Of Significant Accounting Principles And Policies [Line Items]
Warrants outstanding to acquire shares | shares	6,666,666
Class A common stock | Warrants
Summary Of Significant Accounting Principles And Policies [Line Items]
Warrants outstanding to acquire shares | shares	13,333,301
Last sale price of common stock equals or exceeds per share | $ / shares	$ 18.00
Number of trading days | TradingDay	20
Maximum trading days for sending notice of redemption to warrant holders | TradingDay	30
Commercial Services (All Other)
Summary Of Significant Accounting Principles And Policies [Line Items]
Decrease in write-offs, net of recoveries	$ (1,700,000)
Accounting Standards Update 2014-09 | Minimum
Summary Of Significant Accounting Principles And Policies [Line Items]
Average initial term of a contract	3 years
Accounting Standards Update 2014-09 | Maximum
Summary Of Significant Accounting Principles And Policies [Line Items]
Average initial term of a contract	5 years
Government Solutions
Summary Of Significant Accounting Principles And Policies [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation	2023
Deferred revenue	$ 12,200,000	8,900,000
Parking Solutions
Summary Of Significant Accounting Principles And Policies [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 500,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation	2023
Deferred revenue	$ 21,200,000	$ 20,900,000
Current deferred tax liabilities	$ 4,700,000
Customer Concentration Risk | Sales Revenue | Minimum
Summary Of Significant Accounting Principles And Policies [Line Items]
Concentration risk percentage	10.00%
Customer Concentration Risk | Sales Revenue | Government Solutions
Summary Of Significant Accounting Principles And Policies [Line Items]
Number of customers exceeds 10% | Customer	10
Customer Concentration Risk | Sales Revenue | Commercial Services | Hertz Corporation
Summary Of Significant Accounting Principles And Policies [Line Items]
Concentration risk percentage	11.10%	12.60%	12.00%
Customer Concentration Risk | Sales Revenue | Commercial Services | Avis Budget Group, Inc.
Summary Of Significant Accounting Principles And Policies [Line Items]
Concentration risk percentage	13.00%	12.30%	9.50%
Customer Concentration Risk | Sales Revenue | Commercial Services | Enterprise Holdings, Inc.
Summary Of Significant Accounting Principles And Policies [Line Items]
Concentration risk percentage	9.30%	11.40%	11.30%
Customer Concentration Risk | Sales Revenue | Government Solutions | City Of New York Department Of Transportation
Summary Of Significant Accounting Principles And Policies [Line Items]
Concentration risk percentage	19.50%	26.60%	31.30%
Customer Concentration Risk | Sales Revenue | Parking Solutions
Summary Of Significant Accounting Principles And Policies [Line Items]
Number of customers exceeds 10% | Customer	0
Customer Concentration Risk | Accounts Receivable | Avis Budget Group, Inc.
Summary Of Significant Accounting Principles And Policies [Line Items]
Concentration risk percentage	10.20%
Customer Concentration Risk | Accounts Receivable | City Of New York Department Of Transportation
Summary Of Significant Accounting Principles And Policies [Line Items]
Concentration risk percentage	22.00%	39.00%
Customer Concentration Risk | Accounts Receivable | Commercial Services
Summary Of Significant Accounting Principles And Policies [Line Items]
Number of customers exceeds 10% | Customer	0

XML

Significant Accounting Policies - Summary of Concentration of Credit Risk (Details) - Sales Revenue - Customer Concentration Risk	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Government Solutions | City of New York Department of Transportation
Concentration Risk [Line Items]
Concentration risk percentage	19.50%	26.60%	31.30%
Commercial Services | Hertz Corporation
Concentration Risk [Line Items]
Concentration risk percentage	11.10%	12.60%	12.00%
Commercial Services | Avis Budget Group, Inc.
Concentration Risk [Line Items]
Concentration risk percentage	13.00%	12.30%	9.50%
Commercial Services | Enterprise Holdings, Inc.
Concentration Risk [Line Items]
Concentration risk percentage	9.30%	11.40%	11.30%

XML

Significant Accounting Policies - Summary of Activity in Allowance for Credit Loss (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accounts Notes And Loans Receivable [Line Items]
Balance		$ 12,138	$ 11,471
Credit loss expense (income)		14,481	9,588	$ 14,391
Write-offs, net of recoveries		(10,712)	(8,921)
Balance		15,907	12,138	11,471
Commercial Services (Driver Billed)
Accounts Notes And Loans Receivable [Line Items]
Balance	[1]	5,397	3,210
Credit loss expense (income)	[1]	11,739	11,040
Write-offs, net of recoveries	[1]	(7,536)	(8,853)
Balance	[1]	9,600	5,397	3,210
Commercial Services (All Other)
Accounts Notes And Loans Receivable [Line Items]
Balance		3,092	4,277
Credit loss expense (income)		1,307	(1,138)
Write-offs, net of recoveries		(2,822)	(47)
Balance		1,577	3,092	4,277
Government Solutions
Accounts Notes And Loans Receivable [Line Items]
Balance		3,649	3,984
Credit loss expense (income)		950	(314)
Write-offs, net of recoveries		(26)	(21)
Balance		4,573	3,649	3,984
Parking Solutions
Accounts Notes And Loans Receivable [Line Items]
Balance		0	0
Credit loss expense (income)		485	0
Write-offs, net of recoveries		(328)	0
Balance		$ 157	$ 0	$ 0

[1] Driver-billed consists of receivables from drivers of rental cars and fleet management companies for which the Company bills on behalf of its customers. Receivables not collected from drivers within a defined number of days are transferred to customers subject to applicable bad debt sharing agreements.

XML

Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2022
Equipment Installed at Customer Sites | Minimum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Equipment Installed at Customer Sites | Maximum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	7 years
Computer Equipment | Minimum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Computer Equipment | Maximum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	5 years
Furniture | Minimum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Furniture | Maximum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	10 years
Automobiles | Minimum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Automobiles | Maximum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	7 years
Software | Minimum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Software | Maximum
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	7 years
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, estimated useful lives	Shorter of lease term or estimated useful life

XML

Significant Accounting Policies - Carrying Value and Estimated Fair Value (Details) - Level 2 - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Carrying Amount | Senior Notes
Summary Of Significant Accounting Principles And Policies [Line Items]
Total long-term debt	$ 345,615	$ 344,918
Carrying Amount | 2021 Term Loan
Summary Of Significant Accounting Principles And Policies [Line Items]
Total long-term debt	866,365	871,467
Carrying Amount | Revolver
Summary Of Significant Accounting Principles And Policies [Line Items]
Total long-term debt		24,435
Estimated Fair Value | Senior Notes
Summary Of Significant Accounting Principles And Policies [Line Items]
Total long-term debt	313,250	355,250
Estimated Fair Value | 2021 Term Loan
Summary Of Significant Accounting Principles And Policies [Line Items]
Total long-term debt	883,891	895,125
Estimated Fair Value | Revolver
Summary Of Significant Accounting Principles And Policies [Line Items]
Total long-term debt		$ 25,000

XML

Significant Accounting Policies - Key Assumptions Used for Measuring Fair Value of Private Placement Warrant Liabilities (Details) - Private Placement Warrant Liabilities - Level 3	Dec. 31, 2022 yr $ / shares	Dec. 31, 2021 $ / shares yr
Stock Price
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Expected stock price volatility	13.83	15.43
Strike Price
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Expected stock price volatility	11.50	11.50
Expected Term
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Expected stock price volatility | yr	0.8	1.8
Expected Volatility
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Expected stock price volatility	0.440	0.480
Risk-free Interest Rate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Expected stock price volatility	0.0474	0.0066
Expected Dividend Yield
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Expected stock price volatility	0.000	0.000
Estimated Fair Value
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Expected stock price volatility	3.61	5.77

XML

Significant Accounting Policies - Summary of Changes in Private Placement Warrant Liabilities Included in Net Income (Loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract]
Beginning balance	$ 38,466	$ 30,866
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Change In Fair Value Of Private Placement Warrants	Change In Fair Value Of Private Placement Warrants
Change in fair value of private placement warrants	$ (14,400)	$ 7,600
Ending balance	$ 24,066	$ 38,466

XML

Summary of Significant Accounting Policies - Summary of weighted average assumptions for stock options and PSUs (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average expected volatility	45.10%	47.70%	34.50%
Weighted average risk-free interest rate	2.94%	0.94%	0.73%
PSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average expected volatility	48.00%	50.40%	34.00%
Weighted average risk-free interest rate	2.78%	0.33%	0.61%

XML

Acquisitions - Additional Information (Details) $ / shares in Units, $ in Thousands, $ in Millions	Dec. 13, 2021 USD ($)	Dec. 07, 2021 USD ($)		Jun. 17, 2021 USD ($) $ / shares	Jun. 17, 2021 AUD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Business Acquisition [Line Items]
Goodwill						$ 833,480	$ 838,867	$ 586,435
Redflex Holdings Limited
Business Acquisition [Line Items]
Date of acquisition				Jun. 17, 2021	Jun. 17, 2021
Goodwill						56,214
Redflex Holdings Limited | Scheme Amendment
Business Acquisition [Line Items]
Purchase percentage of outstanding equity				100.00%	100.00%
Consideration payable per share | $ / shares				$ 0.96
Consideration amount				$ 117,900	$ 152.5
Transaction costs related to acquisition				$ 9,700
Redflex Holdings Limited | Trademarks
Business Acquisition [Line Items]
Intangible assets						900
Identifiable intangible assets useful life				5 years	5 years
Redflex Holdings Limited | Customer Relationships
Business Acquisition [Line Items]
Intangible assets						25,900
Identifiable intangible assets useful life				10 years	10 years
Redflex Holdings Limited | Developed Technology
Business Acquisition [Line Items]
Intangible assets						18,200
Identifiable intangible assets useful life				8 years 8 months 12 days	8 years 8 months 12 days
T2 Systems Acquisition
Business Acquisition [Line Items]
Date of acquisition		Dec. 07, 2021
Goodwill		$ 195,982	[1]				$ 800
T2 Systems Acquisition | T2 Merger Agreement
Business Acquisition [Line Items]
Transaction costs related to acquisition		3,400
Purchase price		353,200
T2 Systems Acquisition | Trademarks
Business Acquisition [Line Items]
Intangible assets		$ 3,200
Identifiable intangible assets useful life		10 years
T2 Systems Acquisition | Customer Relationships
Business Acquisition [Line Items]
Intangible assets		$ 164,300
Identifiable intangible assets useful life		10 years
T2 Systems Acquisition | Developed Technology
Business Acquisition [Line Items]
Intangible assets		$ 19,300
Identifiable intangible assets useful life		6 years 1 month 6 days
NuPark
Business Acquisition [Line Items]
Business combination cash consideration	$ 5,500
Business combination indemnity holdback	$ 500
Date of acquisition	Dec. 13, 2021
Business combination, contingent consideration payable	$ 1,500					900
Intangible assets	300
Liabilities Assumed	1,300
Goodwill	3,200
Purchase price	$ 7,000
Identifiable intangible assets useful life	10 years
NuPark | Customer Relationships
Business Acquisition [Line Items]
Intangible assets	$ 4,900
Passport Labs Inc
Business Acquisition [Line Items]
Intangible assets						$ 600

[1] (a) The Company adjusted the fair values from the initial valuation as of December 31, 2021 to reflect new information obtained about facts and circumstances that existed as of the T2 Systems acquisition date. The measurement period adjustments include an increase of $0.6 million to the deferred tax liabilities, a $0.4 million decrease to deferred tax assets included within prepaid and other assets, a $0.2 million decrease in deferred revenue, and a net offsetting increase of $0.8 million to the goodwill line item. There was no impact to the consolidated statement of operations as a result of these adjustments.

XML

Acquisitions - Summary of Allocation of Preliminary Purchase Consideration (Details) - USD ($) $ in Thousands		Dec. 31, 2022	Dec. 31, 2021	Dec. 07, 2021		Dec. 31, 2020
Liabilities assumed
Goodwill		$ 833,480	$ 838,867			$ 586,435
Redflex Holdings Limited
Assets acquired
Cash and cash equivalents		8,760
Restricted cash		2,163
Accounts receivable		6,870
Unbilled receivables		5,283
Property and equipment		29,809
Deferred tax assets		10,315
Other assets		19,247
Total assets acquired		127,447
Liabilities assumed
Accounts payable and accrued liabilities		31,936
Deferred revenue		8,048
Long-term debt		14,014
Other long-term liabilities		11,736
Total liabilities assumed		65,734
Goodwill		56,214
Total purchase consideration/Total assets acquired and liabilities assumed		117,927
T2 Systems Acquisition
Assets acquired
Cash and cash equivalents				$ 13,866
Restricted cash				228
Accounts receivable				9,673
Unbilled receivables				2,153
Inventory				7,467
Property and equipment				3,336
Prepaid and other assets	[1]			7,031
Total assets acquired				230,554
Liabilities assumed
Accounts payable and accrued liabilities				10,379
Deferred revenue	[1]			21,002
Deferred tax liabilities	[1]			37,690
Other liabilities				4,228
Total liabilities assumed				73,299
Goodwill			$ 800	195,982	[1]
Total purchase consideration/Total assets acquired and liabilities assumed				353,237
Trademarks | Redflex Holdings Limited
Assets acquired
Intangible assets		900
Trademarks | T2 Systems Acquisition
Assets acquired
Intangible assets				3,200
Customer Relationships | Redflex Holdings Limited
Assets acquired
Intangible assets		25,900
Customer Relationships | T2 Systems Acquisition
Assets acquired
Intangible assets				164,300
Developed Technology | Redflex Holdings Limited
Assets acquired
Intangible assets		$ 18,200
Developed Technology | T2 Systems Acquisition
Assets acquired
Intangible assets				$ 19,300

[1] (a) The Company adjusted the fair values from the initial valuation as of December 31, 2021 to reflect new information obtained about facts and circumstances that existed as of the T2 Systems acquisition date. The measurement period adjustments include an increase of $0.6 million to the deferred tax liabilities, a $0.4 million decrease to deferred tax assets included within prepaid and other assets, a $0.2 million decrease in deferred revenue, and a net offsetting increase of $0.8 million to the goodwill line item. There was no impact to the consolidated statement of operations as a result of these adjustments.

XML

Acquisitions - Summary of Allocation of Preliminary Purchase Consideration (Parenthetical) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 07, 2021	[1]
Business Acquisition [Line Items]
Decrease in deferred tax assets included within prepaid and other assets	$ (4,306)	$ 5,097	$ (3,829)
Deferred revenue	4,591	(3,966)	58
Net offsetting increase in goodwill	$ 833,480	838,867	$ 586,435
T2 Systems Acquisition
Business Acquisition [Line Items]
Increase in deferred tax liabilities		600
Decrease in deferred tax assets included within prepaid and other assets		400
Deferred revenue		200
Net offsetting increase in goodwill		$ 800		$ 195,982

[1] (a) The Company adjusted the fair values from the initial valuation as of December 31, 2021 to reflect new information obtained about facts and circumstances that existed as of the T2 Systems acquisition date. The measurement period adjustments include an increase of $0.6 million to the deferred tax liabilities, a $0.4 million decrease to deferred tax assets included within prepaid and other assets, a $0.2 million decrease in deferred revenue, and a net offsetting increase of $0.8 million to the goodwill line item. There was no impact to the consolidated statement of operations as a result of these adjustments.

XML

Acquisition - Summary of Pro Forma Financial Information (Details) - Redflex and T2 Systems Acquisitions - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Business Acquisition Pro Forma Information [Line Items]
Revenue	$ 650,567	$ 530,807
Net income (loss)	$ 30,099	$ (58,695)

XML

Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid tolls	$ 9,978	$ 7,539
Prepaid services	9,171	8,643
Prepaid income taxes	4,629	5,324
Prepaid computer maintenance	5,492	3,742
Costs to fulfill a customer contract	3,193	3,364
Prepaid insurance	3,112	4,293
Deposits	2,057	6,742
Other	1,972	1,809
Total prepaid expenses and other current assets	$ 39,604	$ 41,456

XML

Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property Plant And Equipment [Line Items]
Property and equipment	$ 217,813	$ 180,039
Less: accumulated depreciation	(108,038)	(83,973)
Property and equipment, net	109,775	96,066
Equipment Installed at Customer Sites
Property Plant And Equipment [Line Items]
Property and equipment	122,507	112,770
Software
Property Plant And Equipment [Line Items]
Property and equipment	30,288	24,207
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment	9,806	9,255
Computer Equipment
Property Plant And Equipment [Line Items]
Property and equipment	20,274	14,215
Furniture
Property Plant And Equipment [Line Items]
Property and equipment	2,648	2,662
Automobiles
Property Plant And Equipment [Line Items]
Property and equipment	12,933	4,761
Construction in Progress
Property Plant And Equipment [Line Items]
Property and equipment	$ 19,357	$ 12,169

XML

Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property Plant And Equipment [Line Items]
Depreciation related tocost to develop software for internal use	$ 3.4	$ 4.4	$ 4.3
Depreciation expense	$ 32.2	$ 26.8	$ 23.1

XML

Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill by Reportable Segment (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021
Goodwill [Line Items]
Balance		$ 838,867	$ 586,435
Measurement period adjustment	[1]	756
Foreign currency translation adjustment		(6,143)	(2,168)
Balance		833,480	838,867
Redflex
Goodwill [Line Items]
Goodwill from Acquisition			56,214
T2 Systems
Goodwill [Line Items]
Goodwill from Acquisition			195,226
NuPark
Goodwill [Line Items]
Goodwill from Acquisition			3,160
Commercial Services
Goodwill [Line Items]
Balance		425,081	426,689
Foreign currency translation adjustment		(5,361)	(1,608)
Balance		419,720	425,081
Government Solutions
Goodwill [Line Items]
Balance		215,400	159,746
Foreign currency translation adjustment		(782)	(560)
Balance		214,618	215,400
Government Solutions | Redflex
Goodwill [Line Items]
Goodwill from Acquisition			56,214
Parking Solutions
Goodwill [Line Items]
Balance		198,386
Measurement period adjustment	[1]	756
Balance		$ 199,142	198,386
Parking Solutions | T2 Systems
Goodwill [Line Items]
Goodwill from Acquisition			195,226
Parking Solutions | NuPark
Goodwill [Line Items]
Goodwill from Acquisition			$ 3,160

[1] (a) This is a measurement period adjustment related to the T2 Systems acquisition, see Note 3. Acquisitions for additional information.

XML

Goodwill and Intangible Assets - Gross Carrying Amount and Accumulated Amortization of Separately Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 857,798	$ 863,315
Accumulated Amortization	480,378	376,016
Less: accumulated amortization	(480,378)	(376,016)
Intangible assets, net	$ 377,420	$ 487,299
Trademarks
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life	4 months 24 days	6 months
Weighted Average Amortization Period	3 years 8 months 12 days	3 years 8 months 12 days
Gross Carrying Amount	$ 36,151	$ 36,225
Accumulated Amortization	32,233	31,429
Less: accumulated amortization	$ (32,233)	$ (31,429)
Non-compete Agreements
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life	1 month 6 days	1 year
Weighted Average Amortization Period	5 years	5 years
Gross Carrying Amount	$ 62,529	$ 62,555
Accumulated Amortization	60,926	49,982
Less: accumulated amortization	$ (60,926)	$ (49,982)
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life	5 years 6 months	6 years 6 months
Weighted Average Amortization Period	9 years 3 months 18 days	9 years 3 months 18 days
Gross Carrying Amount	$ 557,570	$ 561,767
Accumulated Amortization	227,102	167,255
Less: accumulated amortization	$ (227,102)	$ (167,255)
Developed Technology
Finite Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life	1 year 2 months 12 days	2 years 2 months 12 days
Weighted Average Amortization Period	5 years 9 months 18 days	5 years 9 months 18 days
Gross Carrying Amount	$ 201,548	$ 202,768
Accumulated Amortization	160,117	127,350
Less: accumulated amortization	$ (160,117)	$ (127,350)

XML

Goodwill and Intangible Assets - Estimated Amortization Expense in Future Years (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2023	$ 77,347
2024	66,859
2025	64,161
2026	57,170
2027	28,353
Thereafter	83,530
Total	$ 377,420

XML

Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 106.2	$ 89.9	$ 93.5

XML

Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued salaries and wages	$ 19,109	$ 15,744
Current deferred tax liabilities	7,559	0
Current portion of operating lease liabilities	$ 6,355	$ 5,760
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Liabilities, Current	Liabilities, Current
Accrued interest payable	$ 4,459	$ 4,209
Restricted cash due to customers	3,541	3,062
Advanced deposits payable	1,029	2,554
Payroll liabilities	2,136	1,876
Current portion of interest rate swap liability	977
Other	3,682	5,230
Total accrued liabilities	$ 48,847	$ 38,435

XML

Asset Retirement Obligation - Schedule of Changes in Asset Retirement Obligation (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligation, beginning balance		$ 11,824	$ 6,409
Liabilities incurred	[1]	944	5,210
Accretion expense		445	308
Liabilities settled		(220)	(103)
Asset retirement obligation, ending balance		$ 12,993	$ 11,824

[1] For the year ended December 31, 2022, this includes approximately $0.4 million increase resulting from a change in estimate for the impact of inflation. For the year ended December 31, 2021, this includes $3.9 million of asset retirement obligations assumed as part of the Redflex acquisition in 2021, and a $1.2 million increase resulting from a change in estimate for the impact of inflation.

XML

Asset Retirement Obligations (Parenthetical) (Detail) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021
Regulatory Asset [Line Items]
impact of inflation		$ 400
Asset retirement obligations	[1]	$ 944	$ 5,210
Redflex Holdings Limited
Regulatory Asset [Line Items]
Asset retirement obligations			3,900
Change In Impact On Inflation Member
Regulatory Asset [Line Items]
Asset retirement obligations			$ 1,200

[1] For the year ended December 31, 2022, this includes approximately $0.4 million increase resulting from a change in estimate for the impact of inflation. For the year ended December 31, 2021, this includes $3.9 million of asset retirement obligations assumed as part of the Redflex acquisition in 2021, and a $1.2 million increase resulting from a change in estimate for the impact of inflation.

XML

Long-term Debt - Summary of the Company's Long-term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Mar. 31, 2021
Debt Instrument [Line Items]
Debt instrument carrying amount	$ 1,236,106
Less: original issue discounts	(5,637)	$ (6,753)
Less: unamortized deferred financing costs	(18,489)	(22,551)
Total long-term debt	1,211,980	1,243,754
Less: current portion of long-term debt	(21,935)	(36,952)
Long-term debt, net of current portion	1,190,045	1,206,802
2021 Term Loan, due 2028
Debt Instrument [Line Items]
Debt instrument carrying amount	886,106	895,125	$ 650,000
Less: original issue discounts			(3,300)
Less: unamortized deferred financing costs			(700)
Senior Notes, due 2029
Debt Instrument [Line Items]
Debt instrument carrying amount	350,000	350,000
Less: unamortized deferred financing costs			$ (5,700)
PPP Loan
Debt Instrument [Line Items]
Debt instrument carrying amount	0	2,933
Revolver
Debt Instrument [Line Items]
Debt instrument carrying amount	$ 0	$ 25,000

XML

Long-term Debt - Summary of the Company's Long-term Debt (Parenthetical) (Details)	12 Months Ended
	Dec. 31, 2022
2021 Term Loan, due 2028
Debt Instrument [Line Items]
Debt instrument, maturity year	2028
Senior Notes, due 2029
Debt Instrument [Line Items]
Debt instrument, maturity year	2029

XML

Long-term Debt - Scheduled Aggregate Future Principal and Interest Payments of Long-term Debt (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Principal
2023	$ 21,935
2024	9,019
2025	9,019
2026	9,019
2027	9,019
Thereafter	1,178,095
Total	1,236,106
Interest
2023	87,755	[1]
2024	87,056	[1]
2025	86,172	[1]
2026	85,474	[1]
2027	84,775	[1]
Thereafter	33,015	[1]
Total	$ 464,247	[1]

[1] (1) The variable interest rate in effect as of December 31, 2022 was used to calculate interest payments for the 2021 Term Loan.

XML

Long-term Debt - Scheduled Aggregate Future Principal and Interest Payments of Long-term Debt (Parenthetical) (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Debt instrument carrying amount	$ 1,236,106
PPP Loan
Debt Instrument [Line Items]
Debt instrument carrying amount	$ 0	$ 2,933

XML

Long-term Debt - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Mar. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 07, 2021
Debt Instrument [Line Items]
Debt instrument carrying amount			$ 1,236,106,000
Offering discount cost			5,637,000	$ 6,753,000
Deferred financing costs			18,489,000	22,551,000
Repayment of outstanding debt			9,019,000	884,530,000	$ 28,779,000
Outstanding borrowings			$ 886,100,000
Debt instrument, aggregate principal amount	$ 350,000,000
Debt instrument, maturity date	Mar. 26, 2028
Debt instrument interest rate			7.60%
Interest expense including amortization of deferred financing costs and discounts			$ 69,400	44,900,000	40,900
Debt instrument charge			(3,005,000)	5,334,000	0
(Gain) loss on extinguishment of debt			$ 3,005,000	(5,334,000)	0
Debt instrument prepayment penalty				$ 1,066,000
Weighted average effective interest rates			7.00%	4.10%
Subsequent Event
Debt Instrument [Line Items]
Repayments of debt		$ 12,900,000
2021 Term Loan, due 2028
Debt Instrument [Line Items]
Debt instrument carrying amount	$ 650,000,000.0		$ 886,106,000	$ 895,125,000
Debt instrument available amount to borrow	250,000,000.0
Offering discount cost	3,300,000
Deferred financing costs	700,000
Debt instrument, interest rate during the period				1.00%
Debt instrument borrow under new revolver	250,000,000.0
2021 Term Loan, due 2028 | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument interest rate per annum				3.25%
2021 Term Loan, due 2028 | Base Rate
Debt Instrument [Line Items]
Debt instrument interest rate per annum				2.25%
Senior Notes, due 2029
Debt Instrument [Line Items]
Debt instrument carrying amount			$ 350,000,000	$ 350,000,000
Deferred financing costs	$ 5,700,000
Repayment of outstanding debt				865,600,000
Debt instrument, maturity date	Apr. 15, 2029
Fixed interest rate			5.50%
Debt instrument, payment terms			payable on April 15 and October 15 of each year.
Incremental Term Loan
Debt Instrument [Line Items]
Debt instrument carrying amount						$ 250,000,000.0
Offering discount cost						1,300,000
Deferred financing costs						$ 3,800,000
2018 Term Loan
Debt Instrument [Line Items]
Debt instrument charge				5,300,000
(Gain) loss on extinguishment of debt				(5,300,000)
Write off of pre-existing deferred financing costs and discounts				4,000,000.0
Third party costs associated with issuance				1,300,000
PPP Loan
Debt Instrument [Line Items]
Debt instrument carrying amount			$ 0	2,933,000
Debt instrument charge			(3,000,000.0)
(Gain) loss on extinguishment of debt			3,000,000.0
Loan recieved under PPP					$ 2,900,000
Revolver
Debt Instrument [Line Items]
Debt instrument carrying amount			0	25,000,000
Debt instrument available amount to borrow			74,800,000
Aggregate revolving commitment			75,000,000.0
Outstanding borrowings				$ 25,000,000.0
Debt instrument borrow under new revolver			74,800,000
Outstanding letters of credit			$ 200,000
Debt instrument, periodic payment, interest rate			0.375%
Participation and fronting fees percentage on outstanding letter of credit			1.38%
Outstanding borrowings, repayment month and year				2022-01
Revolver | LIBOR 1.25%
Debt Instrument [Line Items]
Debt instrument interest rate per annum			1.25%
Revolver | LIBOR 1.50%
Debt Instrument [Line Items]
Debt instrument interest rate per annum			1.50%
Revolver | Base Rate 0.75%
Debt Instrument [Line Items]
Debt instrument interest rate per annum			0.75%
Revolver | LIBOR 1.75%
Debt Instrument [Line Items]
Debt instrument interest rate per annum			1.75%
Revolver | Base Rate 0.25%
Debt Instrument [Line Items]
Debt instrument interest rate per annum			0.25%
Revolver | Base Rate 0.50%
Debt Instrument [Line Items]
Debt instrument interest rate per annum			0.50%
Maximum | Senior Notes, due 2029
Debt Instrument [Line Items]
Redemption percentage			40.00%

XML

Long-term Debt - Schedule of Consolidated First Lien Net Leverage Ratio and Applicable Prepayment Percentage (Details) - 2021 Term Loan, due 2028	12 Months Ended
	Dec. 31, 2022
> 3.70:1.00
Debt Instrument [Line Items]
Applicable prepayment percentage	50.00%
= 3.70:1.00 and > 3.20:1.00
Debt Instrument [Line Items]
Applicable prepayment percentage	25.00%
= 3.20:1.00
Debt Instrument [Line Items]
Applicable prepayment percentage	0.00%

XML

Long-term Debt - Summary of Senior Notes Redemption Prices Set Forth in Percentages by Year (Details) - Senior Notes, due 2029	12 Months Ended
	Dec. 31, 2022
2024
Debt Instrument, Redemption [Line Items]
Redemption percentage	102.75%
2025
Debt Instrument, Redemption [Line Items]
Redemption percentage	101.375%
2026 and thereafter
Debt Instrument, Redemption [Line Items]
Redemption percentage	100.00%

XML

Leases - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Lease expiration date	Apr. 30, 2035
Operating lease, weighted average remaining lease term	8 years 7 months 6 days
Operating lease liabilities weighted average discount rate	5.00%
Operating lease expense	$ 8.8	$ 7.5	$ 5.3
Variable lease costs	$ 1.5	$ 1.4	$ 1.1

XML

Leases - Summary of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Assets and Liabilities, Lessee [Abstract]
Operating lease liabilities, net of current portion	$ 33,362	$ 34,984
Current portion	6,355	$ 5,760
Current portion	$ 6,202
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Liabilities, Current	Liabilities, Current
Total operating lease liabilities	$ 39,564	$ 40,744

XML

Leases - Summary of Future Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Lessee, Operating Lease, Liability, to be Paid [Abstract]
2023	$ 8,107
2024	7,736
2025	5,329
2026	4,440
2027	3,341
Thereafter	21,033
Total minimum payments	49,986
Less: amount representing interest	(10,422)
Operating lease liabilities	$ 39,564	$ 40,744

XML

Net Income (Loss) Per Share - Schedule of Components of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Numerator:
Net income (loss)		$ 92,475	$ 41,449	$ (4,578)
Denominator:
Weighted average shares - basic		152,848	159,983	161,632
Common stock equivalents		6,178	3,795
Weighted average shares - diluted		159,026	163,778	161,632
Net income (loss) per share - basic		$ 0.61	$ 0.26	$ (0.03)
Net income (loss) per share - diluted		$ 0.50	$ 0.25	$ (0.03)
Antidilutive shares excluded from diluted net income (loss) per share:
Total antidilutive shares excluded		7,048	13,247	27,923
Contingently Issuable Shares
Antidilutive shares excluded from diluted net income (loss) per share:
Total antidilutive shares excluded	[1]	5,000	5,000	5,000
Public warrants
Antidilutive shares excluded from diluted net income (loss) per share:
Total antidilutive shares excluded				13,333
Private Placement Warrants
Antidilutive shares excluded from diluted net income (loss) per share:
Total antidilutive shares excluded			6,667	6,667
Non-qualified Stock Options
Antidilutive shares excluded from diluted net income (loss) per share:
Total antidilutive shares excluded		1,149	1,018	614
Performance Share Units
Antidilutive shares excluded from diluted net income (loss) per share:
Total antidilutive shares excluded		157	130	106
Restricted Stock Units
Antidilutive shares excluded from diluted net income (loss) per share:
Total antidilutive shares excluded		742	432	2,203

[1] (1) Contingently issuable shares relate to the earn-out agreement as discussed in Note 16, Other Significant Transactions.

XML

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands		12 Months Ended
	Aug. 16, 2022	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Income Tax [Line Items]
Excise Tax	1.00%
Deferred tax assets, valuation allowance		$ 5,263		$ 3,785
Tax credits		$ 5,600		6,400
Tax credits, expiration start year		2025
Unrecognized tax benefits, if recognized		$ 2,600
Accrued interest and penalties				100
Unrecognized Deferred Tax Liability		800
Deferred Tax Assets, Operating Loss Carryforwards		16,476		18,193
Other non-current assets
Income Tax [Line Items]
Deferred tax assets		4,000		6,500
State
Income Tax [Line Items]
Deferred tax assets, valuation allowance			$ 5,300	3,800
Federal and State
Income Tax [Line Items]
Operating loss carryforwards		124,400		$ 158,700
Deferred Tax Assets, Operating Loss Carryforwards		$ 24,000
Earliest | State
Income Tax [Line Items]
Income tax examination, year under examination		2018
Latest | State
Income Tax [Line Items]
Income tax examination, year under examination		2019
Maximum
Income Tax [Line Items]
Unrecognized tax benefits, income tax penalties and interest expense		$ 500
Accrued interest and penalties		$ 500
Minimum
Income Tax [Line Items]
Additional tax due to inflation reduction act	15.00%

XML

Income Taxes - Schedule of Income Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
U.S.	$ 140,858	$ 77,101	$ 6,429
Foreign	(13,750)	(9,200)	(5,576)
Income before income taxes	$ 127,108	$ 67,901	$ 853

XML

Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Current Federal	$ 34,071	$ 25,361	$ 4,169
Current State	14,779	10,523	5,399
Current Foreign	1,777	160	652
Total current	50,627	36,044	10,220
Deferred Federal	(8,069)	(7,434)	(1,308)
Deferred State	(4,863)	(1,627)	(2,615)
Deferred Foreign	(3,062)	(531)	(866)
Total deferred	(15,994)	(9,592)	(4,789)
Total income tax provision	$ 34,633	$ 26,452	$ 5,431

XML

Income Taxes - Schedule of Reconciliation to Income Tax Provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Income tax provision at statutory rate	$ 26,693	$ 14,259	$ 179
State income taxes, net of federal income tax effect	8,588	6,748	1,188
Tax rate changes/ valuation of deferred tax items	0	586	1,353
162(m) limitation	1,766	1,325	1,179
Non-deductible expenses	(30)	174	1,786
Stock-based compensation	(545)	(752)	(38)
Unrecognized tax benefits	1,215	174	(929)
Tax impact for change in fair value of warrants	3,024	1,596	237
Change in valuation allowance	1,429	1,435	924
Non-deductible transaction costs	0	1,078	19
Research and development credits	(517)	(125)	(121)
Other	(1,002)	(46)	(346)
Total income tax provision	$ 34,633	$ 26,452	$ 5,431

XML

Income Taxes - Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Accrued expenses and other	$ 6,255	$ 7,334
Allowance for credit losses	9,108	4,927
Net operating loss carryforward	16,476	18,193
Interest expense limitation carryforward	5,108	5,935
Federal and state income tax credits	4,965	5,295
ASC 842 operating lease liabilities	10,986	9,578
R&D Section 174 Capitalization	3,248	0
Stock Compensation	1,995	0
Transaction costs	458	446
Other	2,026	1,042
Gross deferred tax assets	60,625	52,750
Valuation allowance	(5,263)	(3,785)
Deferred tax assets, net of valuation allowance	55,362	48,965
Deferred tax liabilities:
Intangible assets and transaction costs	(42,206)	(62,116)
Property and equipment	(15,265)	(13,562)
Financing costs	(2,392)	(3,077)
Prepaid assets	(2,269)	(1,235)
ASC 842 operating lease assets	(10,403)	(9,104)
481(a) adjustment, net	0	(857)
Gross deferred tax liabilities	(72,535)	(89,951)
Total deferred tax liabilities, net	$ (17,173)	$ (40,986)

XML

Income Taxes - Summary of Activity Related to Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Balance at the beginning of the year	$ 2,878	$ 953
Increases/(decreases) related to current year tax positions	8,076	447
Increases/(decreases) related to prior year tax positions	132	1,478
Expiration due to statute of limitations	(147)	0
Balance at the end of the year	$ 10,675	$ 2,878

XML

Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands					12 Months Ended
	Nov. 04, 2022	May 12, 2022	Aug. 20, 2021	Aug. 09, 2021	Dec. 31, 2022	Dec. 31, 2021	Nov. 30, 2022	Sep. 30, 2022	Aug. 19, 2022	May 07, 2022
Class of Stock [Line Items]
Capital stock authorized for issuance					261,000,000
Common stock, shares authorized					260,000,000	260,000,000
Preferred stock, shares authorized					1,000,000	1,000,000
Preferred stock, par value (in dollars per share)					$ 0.0001	$ 0.0001
Common stock, par value (in dollars per share)					$ 0.0001	$ 0.0001
Share repurchase program, authorized amount								$ 6,900	$ 68,100
Accelerated share repurchase aggregate amount		$ 50,000
Additional delivery common shares	943,361	445,086
Repurchase shares								445,791	3,300,000
Repurchase shares, amount								$ 6,900	$ 68,100
Direct cost					$ 100
Payment for share repurchase					125,071	$ 100,000
Reducing additional paid-in capital account				$ 72,000	15,900
Increasing accumulated deficit account				28,000	$ 109,100
Board of Directors
Class of Stock [Line Items]
Payment for share repurchase				100,000
Class A common stock
Class of Stock [Line Items]
Common stock, shares authorized					260,000,000
Common stock, par value (in dollars per share)			$ 14.60
Initial delivery common shares		2,739,726
Payment for share repurchase					$ 125,000
Number of shares repurchased and retired (in shares)			6,849,315
Class A common stock | Board of Directors
Class of Stock [Line Items]
Share repurchase program, authorized amount				100,000			$ 100,000			$ 125,000
Repurchase shares, amount				$ 100,000			$ 100,000			$ 125,000

XML

Equity Incentive Plan - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Proceeds from exercise of stock options	$ 1,334	$ 155
Tax benefits attributable to stock-based compensation	$ 4,600	$ 4,600	$ 2,900
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock granted vesting period	4 years
Stock based compensation expense, weighted average period of recognition	2 years 8 months 12 days
Contractual term	10 years
Weighted Average Grant Date Fair Value	$ 6.66	$ 6.47	$ 4.36
Number of stock options, vested	324,173	141,218	0
Stock options vested, fair value	$ 1,600	$ 600
Proceeds from exercise of stock options	1,300	200
Unrecognized stock based compensation expense	$ 6,000
2018 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares authorized	10,864,000
Aggregate Common stock available for future grants	3,388,102
2018 Equity Incentive Plan | RSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock granted vesting period	4 years
Fair value of vested stock units	$ 11,400	$ 10,600	$ 10,200
Unrecognized stock based compensation expense	15,400
2018 Equity Incentive Plan | PSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Fair value of vested stock units	0
Unrecognized stock based compensation expense	$ 2,500
Stock based compensation expense, weighted average period of recognition	2 years 9 months 18 days
2018 Equity Incentive Plan | PSU | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of conversion ranges	0.00%
2018 Equity Incentive Plan | PSU | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of conversion ranges	150.00%

XML

Equity Incentive Plan - Summary of Activity of RSUs and PSUs (Details) - 2018 Equity Incentive Plan - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
RSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Beginning balance	1,692,000	2,203,000	3,004,000
Number of Shares, Granted	1,093,000	736,000	576,000
Number of Shares, Vested	(1,030,000)	(1,018,000)	(986,000)
Number of Shares, Forfeited	(260,000)	(229,000)	(391,000)
Number of Shares, Ending balance	1,495,000	1,692,000	2,203,000
Weighted Average Grant Date Fair Value, Beginning balance	$ 11.92	$ 10.64	$ 10.28
Weighted Average Grant Date Fair Value, Granted	14.09	14.12	12.12
Weighted Average Grant Date Fair Value, Vested	11.10	10.41	10.35
Weighted Average Grant Date Fair Value, Forfeited	13.39	13.40	10.74
Weighted Average Grant Date Fair Value, Ending balance	$ 13.82	$ 11.92	$ 10.64
PSU
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Beginning balance	229,000	106,000	0
Number of Shares, Granted	179,000	154,000	116,000
Number of Shares, Vested	0	0	0
Number of Shares, Forfeited	(94,000)	(31,000)	(10,000)
Number of Shares, Ending balance	314,000	229,000	106,000
Weighted Average Grant Date Fair Value, Beginning balance	$ 15.07	$ 13.88	$ 0
Weighted Average Grant Date Fair Value, Granted	15.58	16.28	13.88
Weighted Average Grant Date Fair Value, Vested	0	0	0
Weighted Average Grant Date Fair Value, Forfeited	15.17	16.97	13.88
Weighted Average Grant Date Fair Value, Ending balance	$ 15.33	$ 15.07	$ 13.88

XML

Equity Incentive Plan - Summary of Activity of Stock Options (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Beginning balance	1,163,000	614,000	0
Number of Shares, Granted	846,000	731,000	720,000
Number of Shares, Exercised	(103,000)	(12,000)	0
Number of Shares, Forfeited	(329,000)	(170,000)	(106,000)
Number of Shares, Ending balance	1,577,000	1,163,000	614,000
Number of Shares, Exercisable	324,000
Number of Shares, Unvested and expected to vest	1,253,000
Weighted Average Exercise Price, Beginning balance	$ 13.18	$ 12.56	$ 0
Weighted Average Exercise Price, Granted	13.97	13.95	12.56
Weighted Average Exercise Price, Exercised	12.98	12.62	0
Weighted Average Exercise Price, Forfeited	13.59	14.29	12.56
Weighted Average Exercise Price, Ending balance	13.53	$ 13.18	$ 12.56
Weighted Average Exercise Price, Exercisable	12.96
Weighted Average Exercise Price, Unvested and expected to vest	$ 13.68
Weighted Average Remaining Contractual Term, Balance	8 years 6 months	8 years 8 months 12 days
Weighted Average Remaining Contractual Term, Exercisable	7 years 6 months
Weighted Average Remaining Contractual Term, Unvested and expected to vest	8 years 8 months 12 days
Aggregate Intrinsic Value, Beginning balance	$ 2,636
Aggregate Intrinsic Value, Exercised	348	$ 36
Aggregate Intrinsic Value, Ending balance	$ 619	$ 2,636
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	8 years 6 months	8 years 8 months 12 days
Aggregate Intrinsic Value, Exercisable	$ 293
Aggregate Intrinsic Value, Unvested and expected to vest	$ 326

XML

Equity Incentive Plan - Schedule of Components of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 16,663	$ 13,784	$ 12,589
Operating Expenses
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	1,130	815	837
Selling, General and Administrative Expenses
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 15,533	$ 12,969	$ 11,752

XML

Employee Benefit Plan - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Employee Benefit Plans [Abstract]
Contributions by employer	$ 2.5	$ 1.9	$ 1.7
Employer contribution expense	$ 1.7	$ 1.1

XML

Other Significant Transactions - Additional Information (Details) $ / shares in Units, $ in Thousands					12 Months Ended
		Aug. 20, 2021 shares	Jan. 27, 2020 USD ($) $ / shares shares	Apr. 26, 2019 $ / shares	Dec. 31, 2022 USD ($) yr $ / shares shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2022 USD ($)	Aug. 19, 2022 USD ($)	Dec. 13, 2021 USD ($)	Oct. 17, 2018 USD ($)
Related Party Transaction [Line Items]
Contingent consideration					$ 0					$ 1,500
Share repurchase program, authorized amount								$ 6,900	$ 68,100
Payment for share repurchase					125,071	$ 100,000
Total revenue					741,598	550,590	$ 393,593
Common Class A
Related Party Transaction [Line Items]
Stock Repurchased and Retired During Period, Shares | shares		6,849,315
Payment for share repurchase					$ 125,000
Redflex Irish Investments Pty Ltd [Member]
Related Party Transaction [Line Items]
Percentage of Non-Voting Interest Acquired					16.00%
Cost method investment					$ 2,100	3,700
Total revenue					1,000	500
Dividend income					$ 200	300
Verra Mobility Business Combination
Related Party Transaction [Line Items]
Tax Receivable Agreement, portion of net cash savings paid out					50.00%
Tax Receivable Agreement, portion of net cash savings retained					50.00%
Estimated maximum benefit to be paid to tax receivable agreement					$ 70,000
Tax receivable agreement, amount payable					55,900
Tax receivable agreement, amount payable, current					5,000
Tax receivable agreement, amount payable, non-current					50,900
Tax receivable agreement, amount paid, current					5,100	5,100
Increase (decrease) to payable related to tax receivable agreement adjustment					$ 700	1,000
Contingency period					5 years
Increase Decrease To Payable Related To Tax Receivable Agreement Adjustment					$ 700	$ 1,000
Verra Mobility Business Combination | Platinum Stockholder | Common Stock Price Greater than $13.00 and $15.50
Related Party Transaction [Line Items]
Earn-out shares issuable if condition met | shares			5,000,000
Verra Mobility Business Combination | Platinum Stockholder | Common Stock Price Greater than $13.00
Related Party Transaction [Line Items]
Common stock price | $ / shares				$ 13.00
Verra Mobility Business Combination | Platinum Stockholder | Common Stock Price Greater than $15.50
Related Party Transaction [Line Items]
Common stock price | $ / shares			$ 15.50
Verra Mobility Business Combination | Platinum Stockholder | Earn-Out Agreement
Related Party Transaction [Line Items]
Contingent consideration					$ 36,600						$ 73,150
Term of volatility and risk free rates utilizing a peer group | yr					5
Verra Mobility Business Combination | Platinum Stockholder | Earn-Out Agreement | Earn-Out Scenario Five
Related Party Transaction [Line Items]
Earn-out shares issuable if condition met | shares					0
Verra Mobility Business Combination | Platinum Stockholder | Earn-Out Agreement | Common Stock Price Greater than $13.00
Related Party Transaction [Line Items]
Earn-out shares issuable if condition met | shares					2,500,000,000
Common stock price | $ / shares	[1]				$ 13.00
Verra Mobility Business Combination | Platinum Stockholder | Earn-Out Agreement | Common Stock Price Greater than $15.50
Related Party Transaction [Line Items]
Earn-out shares issuable if condition met | shares					2,500,000,000
Common stock price | $ / shares	[1]				$ 15.50
Verra Mobility Business Combination | Minimum
Related Party Transaction [Line Items]
Common stock price threshold trading days					10 days
Verra Mobility Business Combination | Minimum | Platinum Stockholder | Common Stock Price Greater than $13.00
Related Party Transaction [Line Items]
Common stock price threshold trading days				10 days
Verra Mobility Business Combination | Minimum | Platinum Stockholder | Common Stock Price Greater than $15.50
Related Party Transaction [Line Items]
Common stock price threshold trading days			10 days
Verra Mobility Business Combination | Maximum
Related Party Transaction [Line Items]
Common stock price threshold trading days					20 days
Verra Mobility Business Combination | Maximum | Platinum Stockholder | Common Stock Price Greater than $13.00
Related Party Transaction [Line Items]
Common stock price threshold trading days				20 days
Verra Mobility Business Combination | Maximum | Platinum Stockholder | Common Stock Price Greater than $15.50
Related Party Transaction [Line Items]
Common stock price threshold trading days			20 days
Verra Mobility Business Combination | Maximum | Platinum Stockholder | Earn-Out Agreement
Related Party Transaction [Line Items]
Earn-out shares issuable if condition met | shares					10,000,000
Verra Mobility Business Combination | Common Stock Contingent Consideration | Platinum Stockholder | Common Stock Price Greater than $13.00 and $15.50
Related Party Transaction [Line Items]
Earn-out shares issued value			$ 36,600
Verra Mobility Business Combination | Common Stock Contingent Consideration | Platinum Stockholder | Common Stock Price Greater than $15.50
Related Party Transaction [Line Items]
Earn-out shares issued value			$ 36,600
Verra Mobility Business Combination | Potential Future Shares | Platinum Stockholder | Common Stock Price Greater than $13.00
Related Party Transaction [Line Items]
Earn-out shares issued value					$ 0
Verra Mobility Business Combination | Potential Future Shares | Platinum Stockholder | Common Stock Price Greater than $15.50
Related Party Transaction [Line Items]
Earn-out shares issued value					$ 5,000

[1] The first and second tranches of Earn-Out Shares have been issued, as discussed below.

XML

Other Significant Transactions - Summary of Earn Out Shares Issued by Company to Platinum Stockholder (Details) - Platinum Stockholder - Verra Mobility Business Combination - $ / shares shares in Thousands		12 Months Ended
		Dec. 31, 2022	Jan. 27, 2020	Apr. 26, 2019
Common Stock Price Greater than $13.00
Related Party Transaction [Line Items]
Common Stock Price thresholds				$ 13.00
Common Stock Price Greater than $13.00 | Earn-Out Agreement
Related Party Transaction [Line Items]
Common Stock Price thresholds	[1]	$ 13.00
One-time issuance of shares		2,500,000
Common Stock Price Greater than $15.50
Related Party Transaction [Line Items]
Common Stock Price thresholds			$ 15.50
Common Stock Price Greater than $15.50 | Earn-Out Agreement
Related Party Transaction [Line Items]
Common Stock Price thresholds	[1]	$ 15.50
One-time issuance of shares		2,500,000
Common Stock Price Greater than $18.00 | Earn-Out Agreement
Related Party Transaction [Line Items]
Common Stock Price thresholds		$ 18.00
One-time issuance of shares		2,500,000
Common Stock Price Greater than $20.50 | Earn-Out Agreement
Related Party Transaction [Line Items]
Common Stock Price thresholds		$ 20.50
One-time issuance of shares		2,500,000

[1] The first and second tranches of Earn-Out Shares have been issued, as discussed below.

XML

Commitment and Contingencies - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($)
Loss Contingencies [Line Items]
Non-cancelable purchase commitments outstanding	$ 26.0
Bank guarantees required to support bids and contracts	2.0
Purchase commitments expected to be incurred in 2024	$ 3.9

XML

Segment Reporting - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) Segment	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments | Segment	3
Number of reportable segments | Segment	3
Carrying value of property and equipment	$ 109,775	$ 96,066
Revenues	94,318	39,977	$ 13,302
International
Segment Reporting Information [Line Items]
Carrying value of property and equipment	17,300	14,800
Revenues	46,400	57,700	57,300
Australia
Segment Reporting Information [Line Items]
Carrying value of property and equipment	6,000	6,100
Revenues	34,356	13,948	0
United Kingdom
Segment Reporting Information [Line Items]
Revenues	24,017	16,346	12,007
Canada
Segment Reporting Information [Line Items]
Carrying value of property and equipment	8,900	6,700
Revenues	32,413	6,874	$ 0
Government Solutions | Equipment Installed at Customer Sites
Segment Reporting Information [Line Items]
Carrying value of property and equipment	58,300	61,800
Government Solutions | Automobiles
Segment Reporting Information [Line Items]
Carrying value of property and equipment	$ 7,400	$ 2,700

XML

Segment Reporting - Financial Information by Segment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Segment Reporting Information [Line Items]
Total revenue	$ 741,598	$ 550,590	$ 393,593
Operating expenses	225,194	162,555	114,892
Selling, general and administrative expenses	144,444	94,799	74,927
Other income, net	(12,654)	(12,895)	(11,885)
Segment profit (loss)	164,705	111,866	37,816
Depreciation and amortization	138,684	116,753	116,570
Loss on disposal of assets, net	(1,490)	(48)	274
Transaction and other related expenses	3,381	13,952	1,895
Transformation expenses	1,113	1,687	1,090
Change in fair value of private placement warrants	(14,400)	7,600	1,133
Tax receivable agreement liability adjustment	(720)	(1,016)	6,850
Gain on interest rate swap	$ 996
Derivative, Gain, Statement of Income or Comprehensive Income [Extensible Enumeration]	GainLossOnInterestRateSwap
Stock-based compensation	$ 16,663	13,784	12,589
Impairment on privately-held equity investment	1,340	0
Gain on extinguishment of debt	(3,005)	5,334
Interest expense, net	69,372	44,942	40,865
Income before income taxes	127,108	67,901	853
Service Revenue
Segment Reporting Information [Line Items]
Total revenue	695,218	492,846	336,274
Cost of revenue	16,330	5,337	3,967
Product Sales
Segment Reporting Information [Line Items]
Total revenue	46,380	57,744	57,319
Cost of revenue	30,932	29,809	29,573
Operating Segments
Segment Reporting Information [Line Items]
Other income, net	15,332
Segment profit (loss)	338,540	270,937	181,845
Operating Segments | Government Solutions
Segment Reporting Information [Line Items]
Total revenue	336,667	283,155	212,737
Operating expenses	139,961	96,284	62,387
Selling, general and administrative expenses	61,235	51,052	34,465
Other income, net	679	(2,040)	(111)
Segment profit (loss)	115,767	107,930	84,760
Loss on disposal of assets, net	(931)	48	258
Impairment on privately-held equity investment	1,340
Income before income taxes	114,427	107,930	84,760
Operating Segments | Commercial Services
Segment Reporting Information [Line Items]
Total revenue	325,971	260,899	180,856
Operating expenses	72,328	65,718	52,505
Selling, general and administrative expenses	56,105	42,386	40,462
Other income, net	14,387	(10,837)	(11,774)
Segment profit (loss)	208,534	160,449	97,085
Depreciation and amortization	0
Loss on disposal of assets, net	(522)	0	16
Change in fair value of private placement warrants	0
Tax receivable agreement liability adjustment	0
Stock-based compensation	0
Interest expense, net	0
Income before income taxes	208,534	160,449	97,085
Operating Segments | Parking Solutions
Segment Reporting Information [Line Items]
Total revenue	78,960	6,536
Operating expenses	12,905	553
Selling, general and administrative expenses	27,104	1,361
Other income, net	266	(18)
Segment profit (loss)	14,239	2,558
Depreciation and amortization		0
Loss on disposal of assets, net	(37)	0
Change in fair value of private placement warrants		0
Tax receivable agreement liability adjustment		0
Stock-based compensation		0
Interest expense, net		0
Income before income taxes	14,239	2,558
Operating Segments | Service Revenue | Government Solutions
Segment Reporting Information [Line Items]
Total revenue	307,639	227,992	155,418
Cost of revenue	2,016	1,500	1,405
Operating Segments | Service Revenue | Commercial Services
Segment Reporting Information [Line Items]
Total revenue	325,971	260,899	180,856
Cost of revenue	2,869	3,183	2,562
Operating Segments | Service Revenue | Parking Solutions
Segment Reporting Information [Line Items]
Total revenue	61,608	3,955
Cost of revenue	11,445	654
Operating Segments | Product Sales | Government Solutions
Segment Reporting Information [Line Items]
Total revenue	29,028	55,163	57,319
Cost of revenue	17,436	28,381	29,573
Operating Segments | Product Sales | Parking Solutions
Segment Reporting Information [Line Items]
Total revenue	17,352	2,581
Cost of revenue	13,496	1,428
Corporate and Other
Segment Reporting Information [Line Items]
Selling, general and administrative expenses		0	0
Segment profit (loss)	(0)	(0)	(0)
Depreciation and amortization	138,684	116,753	116,570
Transaction and other related expenses	3,381	13,952	1,895
Transformation expenses	1,113	1,687	1,090
Change in fair value of private placement warrants	(14,400)	7,600	1,133
Tax receivable agreement liability adjustment	(720)	1,016	6,850
Gain on interest rate swap	$ (996)
Derivative, Gain, Statement of Income or Comprehensive Income [Extensible Enumeration]	GainLossOnInterestRateSwap
Stock-based compensation	$ 16,663	13,784	12,589
Gain on extinguishment of debt	(3,005)	5,334
Interest expense, net	69,372	44,942	40,865
Income before income taxes	$ (210,092)	$ (203,036)	$ (180,992)

XML

Segment Reporting - Revenues from International Customers (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Segment Reporting Information [Line Items]
Revenues	$ 94,318	$ 39,977	$ 13,302
Australia
Segment Reporting Information [Line Items]
Revenues	34,356	13,948	0
Canada
Segment Reporting Information [Line Items]
Revenues	32,413	6,874	0
United Kingdom
Segment Reporting Information [Line Items]
Revenues	24,017	16,346	12,007
Other Customer [Member]
Segment Reporting Information [Line Items]
Revenues	$ 3,532	$ 2,809	$ 1,295

XML

Guarantor/Non-Guarantor Financial Information (Unaudited) - Summary of Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 105,204	$ 101,283
Restricted cash	3,911	3,149
Accounts receivable (net of allowance for credit losses of $12.1 million)	163,786	160,979
Unbilled receivables	30,782	29,109
Investment in subsidiary	0
Inventory	19,307	12,093
Prepaid expenses and other current assets	39,604	41,456
Total current assets	362,594	348,069
Installation and service parts, net	22,923	13,332
Property and equipment, net	109,775	96,066
Operating lease assets	37,593	38,862
Intangible assets, net	377,420	487,299
Goodwill	833,480	838,867	$ 586,435
Due from affiliates	0
Other non-current assets	12,484	14,561
Total assets	1,756,269	1,837,056
Current liabilities:
Accounts payable	79,869	67,556
Deferred revenue	31,164
Accrued liabilities	48,847	38,435
Tax receivable agreement liability, current portion	4,994	5,107
Current portion of long-term debt	21,935	36,952
Total current liabilities	186,809	175,191
Long-term debt, net of current portion	1,190,045	1,206,802
Operating lease liabilities, net of current portion	33,362	34,984
Tax receivable agreement liability, net of current portion	50,900	56,615
Private placement warrant liabilities	24,066	38,466
Asset retirement obligation	12,993	11,824	6,409
Due to affiliates	0
Deferred tax liabilities, net	21,149	47,524
Other long-term liabilities	5,875	5,686
Total liabilities	1,525,199	1,577,092
Total stockholders' equity	231,070	259,964	$ 315,572	$ 309,614
Total liabilities and stockholders' equity	1,756,269	$ 1,837,056
Verra Mobility Corporation (Ultimate Parent)
Current assets:
Cash and cash equivalents	0
Restricted cash	0
Accounts receivable (net of allowance for credit losses of $12.1 million)	0
Unbilled receivables	0
Investment in subsidiary	61,811
Inventory	0
Prepaid expenses and other current assets	0
Total current assets	61,811
Installation and service parts, net	0
Property and equipment, net	0
Operating lease assets	0
Intangible assets, net	0
Goodwill	0
Due from affiliates	169,259
Other non-current assets	0
Total assets	231,070
Current liabilities:
Accounts payable	0
Deferred revenue	0
Accrued liabilities	0
Tax receivable agreement liability, current portion	0
Current portion of long-term debt	0
Total current liabilities	0
Long-term debt, net of current portion	0
Operating lease liabilities, net of current portion	0
Tax receivable agreement liability, net of current portion	0
Private placement warrant liabilities	0
Asset retirement obligation	0
Due to affiliates	0
Deferred tax liabilities, net	0
Other long-term liabilities	0
Total liabilities	0
Total stockholders' equity	231,070
Total liabilities and stockholders' equity	231,070
VM Consolidated Inc. (Guarantor Subsidiary)
Current assets:
Cash and cash equivalents	64,979
Restricted cash	3,863
Accounts receivable (net of allowance for credit losses of $12.1 million)	151,882
Unbilled receivables	25,342
Investment in subsidiary	145,370
Inventory	1,976
Prepaid expenses and other current assets	32,869
Total current assets	426,281
Installation and service parts, net	22,923
Property and equipment, net	92,434
Operating lease assets	30,939
Intangible assets, net	276,477
Goodwill	689,697
Due from affiliates	0
Other non-current assets	9,657
Total assets	1,548,408
Current liabilities:
Accounts payable	58,574
Deferred revenue	20,353
Accrued liabilities	37,740
Tax receivable agreement liability, current portion	4,994
Current portion of long-term debt	21,935
Total current liabilities	143,596
Long-term debt, net of current portion	1,190,045
Operating lease liabilities, net of current portion	28,856
Tax receivable agreement liability, net of current portion	50,900
Private placement warrant liabilities	24,066
Asset retirement obligation	12,942
Due to affiliates	30,386
Deferred tax liabilities, net	0
Other long-term liabilities	5,806
Total liabilities	1,486,597
Total stockholders' equity	61,811
Total liabilities and stockholders' equity	1,548,408
Non-guarantor Subsidiaries
Current assets:
Cash and cash equivalents	40,225
Restricted cash	48
Accounts receivable (net of allowance for credit losses of $12.1 million)	11,904
Unbilled receivables	5,440
Investment in subsidiary	0
Inventory	17,331
Prepaid expenses and other current assets	6,735
Total current assets	81,683
Installation and service parts, net	0
Property and equipment, net	17,341
Operating lease assets	6,654
Intangible assets, net	100,943
Goodwill	143,783
Due from affiliates	0
Other non-current assets	2,827
Total assets	353,231
Current liabilities:
Accounts payable	21,295
Deferred revenue	10,811
Accrued liabilities	11,107
Tax receivable agreement liability, current portion	0
Current portion of long-term debt	0
Total current liabilities	43,213
Long-term debt, net of current portion	0
Operating lease liabilities, net of current portion	4,506
Tax receivable agreement liability, net of current portion	0
Private placement warrant liabilities	0
Asset retirement obligation	51
Due to affiliates	138,873
Deferred tax liabilities, net	21,149
Other long-term liabilities	69
Total liabilities	207,861
Total stockholders' equity	145,370
Total liabilities and stockholders' equity	353,231
Eliminations
Current assets:
Cash and cash equivalents	0
Restricted cash	0
Accounts receivable (net of allowance for credit losses of $12.1 million)	0
Unbilled receivables	0
Investment in subsidiary	(207,181)
Inventory	0
Prepaid expenses and other current assets	0
Total current assets	(207,181)
Installation and service parts, net	0
Property and equipment, net	0
Operating lease assets	0
Intangible assets, net	0
Goodwill	0
Due from affiliates	(169,259)
Other non-current assets	0
Total assets	(376,440)
Current liabilities:
Accounts payable	0
Deferred revenue	0
Accrued liabilities	0
Tax receivable agreement liability, current portion	0
Current portion of long-term debt	0
Total current liabilities	0
Long-term debt, net of current portion	0
Operating lease liabilities, net of current portion	0
Tax receivable agreement liability, net of current portion	0
Private placement warrant liabilities	0
Asset retirement obligation	0
Due to affiliates	(169,259)
Deferred tax liabilities, net	0
Other long-term liabilities	0
Total liabilities	(169,259)
Total stockholders' equity	(207,181)
Total liabilities and stockholders' equity	$ (376,440)

XML

Guarantor/Non-Guarantor Financial Information (Unaudited) - Summary of Consolidated Balance Sheets (Parenthetical) (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Condensed Financial Information Disclosure [Abstract]
Allowance for credit losses	$ 15,907	$ 12,138	$ 11,471

XML

Guarantor/Non-Guarantor Financial Information (Unaudited) - Summary of Consolidated Statements of Operations and Comprehensive Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Condensed Statement Of Income Captions [Line Items]
Total revenue	$ 741,598	$ 550,590	$ 393,593
Sales to affiliates	0
Cost of sales to affiliates	0
Operating expenses	226,324	163,370	115,729
Selling, general and administrative expenses	163,133	123,407	89,664
Depreciation, amortization and (gain) loss on disposal of assets, net	140,174	116,801	116,844
Total costs and expenses	576,893	438,724	355,777
Income from operations	164,705	111,866	37,816
Income from equity investment	0
Interest expense, net	69,372	44,942	40,865
Change in fair value of private placement warrants	(14,400)	7,600	1,133
Tax receivable agreement liability adjustment	(720)	(1,016)	6,850
Gain on interest rate swap	(996)	0	0
Gain on extinguishment of debt	(3,005)	5,334	0
Other income, net	(12,654)	(12,895)	(11,885)
Total other expenses	37,597	43,965	36,963
Income before income taxes	127,108	67,901	853
Income tax provision (benefit)	34,633	26,452	5,431
Net income (loss)	92,475	41,449	(4,578)
Other comprehensive (loss) income:
Change in foreign currency translation adjustment	(7,771)	(5,305)	2,788
Total comprehensive income (loss)	84,704	36,144	(1,790)
Verra Mobility Corporation (Ultimate Parent)
Condensed Statement Of Income Captions [Line Items]
Total revenue	0
Sales to affiliates	0
Cost of sales to affiliates	0
Operating expenses	0
Selling, general and administrative expenses	0
Depreciation, amortization and (gain) loss on disposal of assets, net	0
Total costs and expenses	0
Income from operations	0
Income from equity investment	(92,475)
Interest expense, net	0
Change in fair value of private placement warrants	0
Tax receivable agreement liability adjustment	0
Gain on interest rate swap	0
Gain on extinguishment of debt	0
Other income, net	0
Total other expenses	(92,475)
Income before income taxes	92,475
Income tax provision (benefit)	0
Net income (loss)	92,475
Other comprehensive (loss) income:
Change in foreign currency translation adjustment	0
Total comprehensive income (loss)	92,475
VM Consolidated Inc. (Guarantor Subsidiary)
Condensed Statement Of Income Captions [Line Items]
Total revenue	645,492
Sales to affiliates	(1,788)
Cost of sales to affiliates	(10)
Operating expenses	186,778
Selling, general and administrative expenses	139,565
Depreciation, amortization and (gain) loss on disposal of assets, net	119,617
Total costs and expenses	472,504
Income from operations	172,988
Income from equity investment	4,039
Interest expense, net	70,652
Change in fair value of private placement warrants	(14,400)
Tax receivable agreement liability adjustment	(720)
Gain on interest rate swap	(996)
Gain on extinguishment of debt	(3,005)
Other income, net	(10,794)
Total other expenses	44,776
Income before income taxes	128,212
Income tax provision (benefit)	35,737
Net income (loss)	92,475
Other comprehensive (loss) income:
Change in foreign currency translation adjustment	0
Total comprehensive income (loss)	92,475
Non-guarantor Subsidiaries
Condensed Statement Of Income Captions [Line Items]
Total revenue	96,106
Sales to affiliates	1,788
Cost of sales to affiliates	10
Operating expenses	39,546
Selling, general and administrative expenses	23,568
Depreciation, amortization and (gain) loss on disposal of assets, net	20,557
Total costs and expenses	104,389
Income from operations	(8,283)
Income from equity investment	0
Interest expense, net	(1,280)
Change in fair value of private placement warrants	0
Tax receivable agreement liability adjustment	0
Gain on interest rate swap	0
Gain on extinguishment of debt	0
Other income, net	(1,860)
Total other expenses	(3,140)
Income before income taxes	(5,143)
Income tax provision (benefit)	(1,104)
Net income (loss)	(4,039)
Other comprehensive (loss) income:
Change in foreign currency translation adjustment	(7,771)
Total comprehensive income (loss)	(11,810)
Eliminations
Condensed Statement Of Income Captions [Line Items]
Total revenue	0
Sales to affiliates	0
Cost of sales to affiliates	0
Operating expenses	0
Selling, general and administrative expenses	0
Depreciation, amortization and (gain) loss on disposal of assets, net	0
Total costs and expenses	0
Income from operations	0
Income from equity investment	88,436
Interest expense, net	0
Change in fair value of private placement warrants	0
Tax receivable agreement liability adjustment	0
Gain on interest rate swap	0
Gain on extinguishment of debt	0
Other income, net	0
Total other expenses	88,436
Income before income taxes	(88,436)
Income tax provision (benefit)	0
Net income (loss)	(88,436)
Other comprehensive (loss) income:
Change in foreign currency translation adjustment	0
Total comprehensive income (loss)	(88,436)
Service Revenue
Condensed Statement Of Income Captions [Line Items]
Total revenue	695,218	492,846	336,274
Cost of revenue	16,330	5,337	3,967
Service Revenue | Verra Mobility Corporation (Ultimate Parent)
Condensed Statement Of Income Captions [Line Items]
Total revenue	0
Cost of revenue	0
Service Revenue | VM Consolidated Inc. (Guarantor Subsidiary)
Condensed Statement Of Income Captions [Line Items]
Total revenue	620,605
Cost of revenue	11,047
Service Revenue | Non-guarantor Subsidiaries
Condensed Statement Of Income Captions [Line Items]
Total revenue	74,613
Cost of revenue	5,283
Service Revenue | Eliminations
Condensed Statement Of Income Captions [Line Items]
Total revenue	0
Cost of revenue	0
Product Sales
Condensed Statement Of Income Captions [Line Items]
Total revenue	46,380	57,744	57,319
Cost of revenue	30,932	$ 29,809	$ 29,573
Product Sales | Verra Mobility Corporation (Ultimate Parent)
Condensed Statement Of Income Captions [Line Items]
Total revenue	0
Cost of revenue	0
Product Sales | VM Consolidated Inc. (Guarantor Subsidiary)
Condensed Statement Of Income Captions [Line Items]
Total revenue	26,675
Cost of revenue	15,507
Product Sales | Non-guarantor Subsidiaries
Condensed Statement Of Income Captions [Line Items]
Total revenue	19,705
Cost of revenue	15,425
Product Sales | Eliminations
Condensed Statement Of Income Captions [Line Items]
Total revenue	0
Cost of revenue	$ 0

XML

Guarantor/Non-Guarantor Financial Information (Unaudited) - Summary of Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash Flows from Operating Activities:
Net income (loss)		$ 92,475	$ 41,449	$ (4,578)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		138,684	116,753	116,570
Amortization of deferred financing costs and discounts		5,472	5,170	5,437
Change in fair value of private placement warrants		(14,400)	7,600	1,133
Tax receivable agreement liability adjustment		(720)	(1,016)	6,850
Gain on interest rate swap		(996)
Gain on extinguishment of debt		(3,005)	5,334
Credit loss expense		14,481	9,588	14,391
Deferred income taxes		(17,355)	(10,640)	(4,746)
Stock-based compensation		16,663	13,784	12,589
Impairment on privately-held equity investment		1,340	0
Other		1,654	308	1,210
Income (Loss) From Equity Investments		0
Changes in operating assets and liabilities:
Accounts receivable		(17,685)	14,946	(90,592)
Unbilled receivables		(1,936)	(7,753)	5,964
Inventory		(10,310)	2,798
Prepaid expenses and other assets		4,306	(5,097)	3,829
Deferred revenue		4,591	(3,966)	58
Accounts payable and other current liabilities		6,513
Due to affiliates		0
Other liabilities		(1,435)	(4,383)	(4,281)
Net cash provided by operating activities		218,337	193,171	46,909
Cash Flows from Investing Activities:
Payment of contingent consideration		(647)
Purchases of installation and service parts and property and equipment		(48,186)	(24,998)	(24,260)
Cash proceeds from the sale of assets		241	265	107
Net cash used in investing activities		(48,592)	(475,970)	(24,153)
Cash Flows from Financing Activities:
Repayment on revolver		(25,000)
Repayment of long-term debt		(9,019)	(884,530)	(28,779)
Payment of debt issuance costs		(447)	(10,646)	(1,078)
Share repurchase and retirement		(125,071)	(100,000)
Proceeds from exercise of stock options		1,334	155
Payment of employee tax withholding related to RSUs vesting		(6,524)	(5,691)	(4,147)
Payment of contingent consideration		(205)
Net cash used in financing activities		(164,932)	268,722	(34,004)
Effect of exchange rate changes on cash and cash equivalents		(130)	(2,383)	(290)
Net (decrease) increase in cash, cash equivalents and restricted cash		4,683	(16,460)	(11,538)
Cash, cash equivalents and restricted cash - beginning of period		104,432	120,892	132,430
Cash, cash equivalents and restricted cash - end of period		109,115	104,432	120,892
Supplemental cash flow information:
Interest paid		63,663	35,786	35,822
Income taxes paid, net of refunds		47,623	35,774	12,638
Supplemental non-cash investing and financing activities:
Additions related to asset retirement obligations, property and equipment, and other	[1]	946	1,397	133
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		10,421	1,714	$ 1,289
Verra Mobility Corporation (Ultimate Parent)
Cash Flows from Operating Activities:
Net income (loss)		92,475
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		0
Amortization of deferred financing costs and discounts		0
Change in fair value of private placement warrants		0
Tax receivable agreement liability adjustment		0
Gain on interest rate swap		0
Gain on extinguishment of debt		0
Credit loss expense		0
Deferred income taxes		0
Stock-based compensation		0
Impairment on privately-held equity investment		0
Other		0
Income (Loss) From Equity Investments		(92,475)
Changes in operating assets and liabilities:
Accounts receivable		0
Unbilled receivables		0
Inventory		0
Prepaid expenses and other assets		0
Deferred revenue		0
Accounts payable and other current liabilities		0
Due to affiliates		0
Other liabilities		0
Net cash provided by operating activities		(0)
Cash Flows from Investing Activities:
Payment of contingent consideration		0
Purchases of installation and service parts and property and equipment		0
Cash proceeds from the sale of assets		0
Net cash used in investing activities		0
Cash Flows from Financing Activities:
Repayment on revolver		0
Repayment of long-term debt		0
Payment of debt issuance costs		0
Share repurchase and retirement		0
Proceeds from exercise of stock options		0
Payment of employee tax withholding related to RSUs vesting		0
Payment of contingent consideration		0
Net cash used in financing activities		0
Effect of exchange rate changes on cash and cash equivalents		0
Net (decrease) increase in cash, cash equivalents and restricted cash		(0)
Cash, cash equivalents and restricted cash - beginning of period		0
Cash, cash equivalents and restricted cash - end of period		(0)	0
Supplemental cash flow information:
Interest paid		0
Income taxes paid, net of refunds		0
Supplemental non-cash investing and financing activities:
Additions related to asset retirement obligations, property and equipment, and other		0
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		0
VM Consolidated Inc. (Guarantor Subsidiary)
Cash Flows from Operating Activities:
Net income (loss)		92,475
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		118,127
Amortization of deferred financing costs and discounts		5,472
Change in fair value of private placement warrants		(14,400)
Tax receivable agreement liability adjustment		(720)
Gain on interest rate swap		(996)
Gain on extinguishment of debt		(3,005)
Credit loss expense		13,744
Deferred income taxes		(15,473)
Stock-based compensation		16,663
Impairment on privately-held equity investment		1,340
Other		1,654
Income (Loss) From Equity Investments		4,039
Changes in operating assets and liabilities:
Accounts receivable		(15,445)
Unbilled receivables		(1,123)
Inventory		(3,510)
Prepaid expenses and other assets		529
Deferred revenue		3,433
Accounts payable and other current liabilities		2,408
Due to affiliates		7
Other liabilities		(581)
Net cash provided by operating activities		204,638
Cash Flows from Investing Activities:
Payment of contingent consideration		(647)
Purchases of installation and service parts and property and equipment		(39,447)
Cash proceeds from the sale of assets		(241)
Net cash used in investing activities		(39,853)
Cash Flows from Financing Activities:
Repayment on revolver		(25,000)
Repayment of long-term debt		(9,019)
Payment of debt issuance costs		(447)
Share repurchase and retirement		(125,071)
Proceeds from exercise of stock options		1,334
Payment of employee tax withholding related to RSUs vesting		(6,524)
Payment of contingent consideration		(205)
Net cash used in financing activities		(164,932)
Effect of exchange rate changes on cash and cash equivalents		0
Net (decrease) increase in cash, cash equivalents and restricted cash		(147)
Cash, cash equivalents and restricted cash - beginning of period		68,989
Cash, cash equivalents and restricted cash - end of period		68,842	68,989
Supplemental cash flow information:
Interest paid		63,663
Income taxes paid, net of refunds		46,326
Supplemental non-cash investing and financing activities:
Additions related to asset retirement obligations, property and equipment, and other		946
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		10,421
Non-guarantor Subsidiaries
Cash Flows from Operating Activities:
Net income (loss)		(4,039)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		20,557
Amortization of deferred financing costs and discounts		0
Change in fair value of private placement warrants		0
Tax receivable agreement liability adjustment		0
Gain on interest rate swap		0
Gain on extinguishment of debt		0
Credit loss expense		737
Deferred income taxes		(1,882)
Stock-based compensation		0
Impairment on privately-held equity investment		0
Other		0
Income (Loss) From Equity Investments		0
Changes in operating assets and liabilities:
Accounts receivable		(2,240)
Unbilled receivables		(813)
Inventory		(6,800)
Prepaid expenses and other assets		3,777
Deferred revenue		1,158
Accounts payable and other current liabilities		4,105
Due to affiliates		(7)
Other liabilities		(854)
Net cash provided by operating activities		13,699
Cash Flows from Investing Activities:
Payment of contingent consideration		0
Purchases of installation and service parts and property and equipment		(8,739)
Cash proceeds from the sale of assets		0
Net cash used in investing activities		(8,739)
Cash Flows from Financing Activities:
Repayment on revolver		0
Repayment of long-term debt		0
Payment of debt issuance costs		0
Share repurchase and retirement		0
Proceeds from exercise of stock options		0
Payment of employee tax withholding related to RSUs vesting		0
Payment of contingent consideration		0
Net cash used in financing activities		0
Effect of exchange rate changes on cash and cash equivalents		(130)
Net (decrease) increase in cash, cash equivalents and restricted cash		4,830
Cash, cash equivalents and restricted cash - beginning of period		35,443
Cash, cash equivalents and restricted cash - end of period		40,273	35,443
Supplemental cash flow information:
Interest paid		0
Income taxes paid, net of refunds		1,297
Supplemental non-cash investing and financing activities:
Additions related to asset retirement obligations, property and equipment, and other		0
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		0
Eliminations
Cash Flows from Operating Activities:
Net income (loss)		(88,436)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		0
Amortization of deferred financing costs and discounts		0
Change in fair value of private placement warrants		0
Tax receivable agreement liability adjustment		0
Gain on interest rate swap		0
Gain on extinguishment of debt		0
Credit loss expense		0
Deferred income taxes		0
Stock-based compensation		0
Impairment on privately-held equity investment		0
Other		0
Income (Loss) From Equity Investments		88,436
Changes in operating assets and liabilities:
Accounts receivable		0
Unbilled receivables		0
Inventory		0
Prepaid expenses and other assets		0
Deferred revenue		0
Accounts payable and other current liabilities		0
Due to affiliates		0
Other liabilities		0
Net cash provided by operating activities		0
Cash Flows from Investing Activities:
Payment of contingent consideration		0
Purchases of installation and service parts and property and equipment		0
Cash proceeds from the sale of assets		0
Net cash used in investing activities		0
Cash Flows from Financing Activities:
Repayment on revolver		0
Repayment of long-term debt		0
Payment of debt issuance costs		0
Share repurchase and retirement		0
Proceeds from exercise of stock options		0
Payment of employee tax withholding related to RSUs vesting		0
Payment of contingent consideration		0
Net cash used in financing activities		0
Effect of exchange rate changes on cash and cash equivalents		0
Net (decrease) increase in cash, cash equivalents and restricted cash		0
Cash, cash equivalents and restricted cash - beginning of period		0
Cash, cash equivalents and restricted cash - end of period		0	$ 0
Supplemental cash flow information:
Interest paid		0
Income taxes paid, net of refunds		0
Supplemental non-cash investing and financing activities:
Additions related to asset retirement obligations, property and equipment, and other		0
Purchases of installation and service parts and property and equipment in accounts payable and accrued liabilities at year-end		$ 0

[1] (a) Asset retirement obligations of $3.9 million assumed as part of the Redflex acquisition in 2021 are excluded from these additions.

XML

Guarantor/Non-Guarantor Financial Information (Unaudited) - Summary of Consolidated Statements of Cash Flows (Parenthetical) (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021
Condensed Statement of Income Captions [Line Items]
Asset retirement obligations	[1]	$ 944	$ 5,210
Redflex Holdings Limited
Condensed Statement of Income Captions [Line Items]
Asset retirement obligations			$ 3,900

[1] For the year ended December 31, 2022, this includes approximately $0.4 million increase resulting from a change in estimate for the impact of inflation. For the year ended December 31, 2021, this includes $3.9 million of asset retirement obligations assumed as part of the Redflex acquisition in 2021, and a $1.2 million increase resulting from a change in estimate for the impact of inflation.