Q1 2025 Verra Mobility Corp Earnings Call
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Michelle: Good day, and thank you for standing by at the very least first quarter of the 75 earnings conference call. My name is Michelle, and I'll be your conference operator today. At this time, all participants are on the Sony mode.
Michelle: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message as your hand is raised. To withdraw your question, please press star 1-1 again. Please be about 5-6.
I'm not going to get it.
for years today, Mark Zindler has won the last relations. Please go ahead.
Speaker Change: Thank you. Good afternoon and welcome to Verra Mobility's first quarter of 2025 Hernings calls. Today, we'll be discussing the results announced in our press release issued after the market closed along with our earnings presentation, which is available in the investor relations section of our website at ir.verremobility.com
Speaker Change: With me on the call are David Roberts, Verra Mobility's Chief Executive Officer, and Craig Conti, our Chief Financial Officer
Speaker Change: David will begin with prepare remarks, followed by Craig and then we'll open up the call for Q&A.
Speaker Change: Management may make forward-looking statements during the call regarding future events, anticipated future trends, and the anticipated future performance of the company.
Speaker Change: We caution you that such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.
Speaker Change: Actual results made different materially from those projected in the forward-looking statements due to a variety of risk factors.
Speaker Change: These factors are described in our SEC violence. Please refer to our earnings press release and investor presentation for Verra Mobility's please or looking to statement this pleasure.
Speaker Change: Any forward-looking statements that we make on this call are based on our beliefs and assumptions today and we do not undertake any obligation to update forward-looking statements.
Speaker Change: Finally, during today's call, we'll refer to certain non-GAF financial measures.
Speaker Change: A reconciliation of these non-GAAP measures for the most directly comparable gap measure is included in our earnings release.
With that, I'll turn the call over to David.
Thank you, Mark, and thanks everyone for joining us.
David Roberts: We delivered a strong first quarter with all key financial measures ahead of our internal expectations.
David Roberts: Total revenue for the quarter increased 6% over the same period last year. It's $223 million.
David Roberts: driven by outperformance in all three business segments relative to our internal plan.
David Roberts: Adjusted EPS increased 11% over the prior year period given our operating performance, recent share repurchases, and the reduction in our interest rate on our term loan debt.
David Roberts: Before I elaborate further on our financial performance, I am pleased to report that the New York City Department of Transportation identified Verra Mobility as the vendor to manage New York City's automated enforcement safety programs for what is expected to be a five-year period after the company's current contract expires in December of 2025. Thank you.
David Roberts: We are honored by the opportunity to continue serving as New York City's trusted technology provider on a world-class transportation safety program.
David Roberts: This remains an active procurement as we are currently engaged in contract negotiations with the New York City Department of Transportation As such, we do not intend to make any additional disclosures about the program until the contract is finalized
David Roberts: Moving on to the second level financials commercial services first quarter revenue and segment profit increase about 6% and 4% respectively over the prior year period.
David Roberts: Rack tolling increased 6% over the prior year period driven by a minus 1% increase in TSA travel volume, increased product adoption, and higher tolling activity compared to the first quarter of last year.
David Roberts: Additionally, FMC revenue grew 12% compared to the first quarter of 2024, primarily due to the increased vehicle enrollments as well as tire-tolling activity.
David Roberts: Looking ahead, we anticipate that FNC growth rates will moderate due to tougher accounts over the balance of 2020-25.
David Roberts: Government Solutions Service Revenue increased 4% over the first quarter of 2024. Revenue from New York City, our largest government solutions customer was essentially flat year over year, as we await the final evaluation of the aforementioned contracts.
David Roberts: Service revenue increased 7% outside in New York City, driven by expansion from existing customers and new cities implementing photo enforcement programs.
David Roberts: To a revenue, including international product sale, was up about 8% over the prior year quarter, fueled by a $4 million increase to product sales compared to the first quarter, 2024.
David Roberts: Moving on to T2, our parking solutions business, total revenue increased about 2% for the quarter, driven by increased revenue from SaaS product offerings, and a modest increase in product sales, partially offset by lower professional services revenue.
David Roberts: Next, I will move on to the macro environment and the implications to our business.
David Roberts: We monitor domestic travel demand as it directly influences our commercial services business. We are experiencing a broader pullback in consumer confidence levels and the impact on travel demand as evidenced by the U.S. air carriers cutting their forecast.
David Roberts: As I mentioned, first quarter, TSA volume increased about 1% over the first quarter of last year and second quarter of today is about 100% of the same period last year.
David Roberts: In this uncertain economic environment, we anticipate that discretionary spending may be impacted and travel domain may soften as a result. Consequently, we have incorporated a modest desaleration of travel volumes in the second half of 2025 in our current assumptions.
David Roberts: This is subject to further change and we are closely monitoring the airline industry, which is often a good indicator of trends that impact the commercial services business.
David Roberts: Next I'll discuss the demand for automated further enforcement, the key driver for our government solutions business.
David Roberts: We continue to see positive support of Photon Force and Programs across the United States in total. The enabling legislation passed over the prior two-and-a-half years across the United States adds approximately $185 million of Tam.
David Roberts: with the potential to expand over 300 million as further legislation allows in California.
David Roberts: Our execution against the standards is strong, and the first quarter we've booked about $6 million of incremental annual recurring revenue at full run rate, bringing the trailing 12 months total to $52 million.
David Roberts: Notable first quarter bookings include Windsor, Colorado, Red Light, excuse me, Windsor, Colorado, Red Light and Ontario Tennis Speed Extension programs along with Carroll County, Georgia, School bus stoparm extension.
David Roberts: Moreover, our pipeline for Q2 is attractive, as we have a number of words awaiting contract execution.
David Roberts: Our government solutions, annual recurring revenues bookings typically materialize into revenue of rate 12 to 80 month period.
David Roberts: In conjunction with an approximate 9-7% increase in contract, approximate 9-7% contract renewal rate
David Roberts: We believe this demonstrates a strong and predictable recurring revenue stream.
David Roberts: Moving on for a full-year outlook, we are maintaining our full-year 2025 financial diet. However, recognizing that there's a risk with uncertain travel, the man we may trend towards the lower end of the range of previously-providing.
David Roberts: Our guidance ranges factor in a level of travel-demandary building, and we will continue to re-evaluate at the summer travel season kicks off in earnest.
David Roberts: Additionally, note that our growth in margin expectations from government solutions and T2 remain unchanged, as the market for photo enforcement is strong and our parking business turnaround is showing some early signs of success.
We believe these businesses are areas are largely unaffected by economic sensitivity.
David Roberts: Craig, I'll turn to you to guide us through our financial results and additional details on our 2025 financial
Craig Conti: Thank you, David, and hello, everyone. I appreciate you joining us on the call today. Let's turn this bike forward, which outlines the key financial measures for the consolidated business for the first quarter.
David Roberts: Our Q1 performance exceeded internal expectations, which included 5% service revenue growth and 6% total revenue growth year-over-year.
David Roberts: The service revenue growth, which consists primarily of recurring revenue, was driven by a modest increase in travel funds, increased product adoption, and higher tolling activity in commercial services as well as service revenue growth outside of New York City and the government solutions business.
David Roberts: At the segment level, commercial services grew 6% year-over-year, government solution service revenue increased by 4% over the prior year, and key to system staff and services revenue was essentially flat compared to the first quarter of 2024.
David Roberts: Total product revenue was $11 million for the quarter. Government solutions contributed roughly $8 million and T2 delivered about $3 million in product sales overall for more.
David Roberts: Additionally, our consolidated adjusted EBITDA for the quarter was $95 million dollars in the increase of approximately 3% versus last year.
David Roberts: We've reported net income of 32 million dollars for the quarter, including a tax provision of about 12 million, representing an effective tax rate of 28%.
David Roberts: Gapdoluted EPS was 20 cents per share for the first quarter of 2025 compared to 17 cents per share for the prior year period.
David Roberts: Adjusted EPS, which excludes amortization, stock-based compensation, and other non-recurring items was $0.30 per share for the first quarter of this year compared to $0.27 per share in the first quarter of 2024, representing 11% year-over-year growth.
David Roberts: The adjusted EPS growth was driven by an increase in adjusted EBITDA, a sustained reduction in interest expense driven by our prior year debt repricing efforts and our share repurchases
David Roberts: Cast flows provided by operating activities totaled $63 million, and we delivered $42 million of free cast flow for the quarter ahead of our internal expectation.
David Roberts: Charity Slide 5, we generated $404 million of adjusted e-bina on approximately $893 million of revenue for the trailing 12 months, representing a 45% adjusted e-bina margin.
David Roberts: Additionally, we generated 174 million of free cash flow for a 43 percent conversion of just to do that over the trailer 12 months.
David Roberts: Next, I'll walk through the first quarter performance in each of our three business segments beginning with commercial services on Spyth Sticks.
CS, your over-year revenue growth was 6% in the first quarter.
David Roberts: Rack tolling revenue increased 6% or about 4 million over the same period last year, driven by modest travel demand growth and increased product adoption and tolling activity.
David Roberts: Our FMC business grew 12 percent, or about 2 million year over year, driven by the enrollment of new vehicles in tolling growth from existing and newly enrolled FMC customers.
David Roberts: As David mentioned, we anticipate that FMC growth rates will moderate over the balance of 2025 due to tougher counts.
David Roberts: Commercial services segment profit increased 4% over the prior year. Revenue growth was partially offset by ERP implementation costs as well as higher bad debt expense driven by a non-recurring
David Roberts: Turning to slide 7, government solutions had solid service revenue growth in the quarter, driven by 7% growth outside of New York City.
David Roberts: Total revenue grew 8% over the prior year quarter, benefiting from about 8 million in promise sales, which was a $4 million increase over the same period last year.
David Roberts: The reduction in margins versus the prior years primarily due to increased marketing and business development costs.
David Roberts: Project Information Costs for newly awarded programs and ERP's implementation classes.
Thank you.
Let's turn this light 8 for our review of the results of T2 systems.
David Roberts: We generated revenue of $20 million in segment profit of approximately $3 million for the quarter. Fast and services sales were essentially flat compared to the prior year when product revenues were up 13% or $400,000 compared to 2024.
David Roberts: Breaking the T2 SAS and services revenue down a bit for recurring SAS revenue grew about 5% over the prior
David Roberts: However, offsetting this increase was a decline in installation and other professional services during the reduction in product sales over the prior quarters.
David Roberts: Okay, let's turn to slide nine to discuss the balance sheet and take a closer look at leverage.
David Roberts: We ended the quarter with net debt balance of 935 million, which reflects the strong free cash flow we generated in the first quarter.
David Roberts: Net leverage landed at 2.3 times, and we've maintained significant liquidity with our on drawn credit for all of them.
David Roberts: Our gross debt balance at your end stands on about $1 billion, of which approximately $690 billion is floating brick debt.
David Roberts: Okay, now we'll turn this light 10 and have a look at full year 2025 guys.
David Roberts: Based on our first quarter results and our outlook for the remainder of the year, we are reaffirming all guidance measures.
David Roberts: As David discussed, our primary consideration is the uncertain economic and fire made potential impact travel. Ultimately, based on our strong first quarter performance and our ability to withstand some level of travel volume variability, we are reaffirming guidance.
David Roberts: Recognizing that there's a risk of moving to the lower end of guidance of the guidance ranges of travel demand continues to worsen to the current levels.
David Roberts: In the event that the U.S. economy enters a recession and we see a material move downward in the PSA volume. We will reassess and update the market accordingly.
David Roberts: Additionally, we have evaluated potential tariff exposure and we expect a direct impact to be immaterial to our business in the near term. However, as we've discussed, the indirect impact to consumer and business spending may impact travel demand in our commercial service business.
David Roberts: As a reminder, the full year 2025 guidance ranges provided on our 4th quarter 2024
David Roberts: We expect total revenue in the range of 925 to 935 million, representing approximately 6% growth at the midpoint over 2020.
David Roberts: We expect adjusted EBITDA in the range 410 to 420 million, representing approximately 3% growth at the midpoint.
David Roberts: He anticipates adjusted EPS in the range of $1.30 to $1.35 per share.
David Roberts: In free cash flow is expected to be in the range of 175-185 million, representing a conversion rate
[inaudible]
David Roberts: Moving on to the segment level, we are reaffirming that government solutions is expected to generate the high end of mid-single-digit, total revenue growth.
David Roberts: driven by the expansion of camera installations with existing customers and new customers awarded in fiscal year 2024.
David Roberts: We call that this growth includes an expectation of last service revenue from New York City in 2025 hundreds of legacy contracts, what we work through the contract negotiations.
David Roberts: Additionally, we expect product revenue to be largely flat to 2024 levels.
David Roberts: Taken together, both New York City Service and Global Product Sales comprise nearly 40% of total government solutions rent.
David Roberts: The remaining 60% of government solutions revenue is expected to grow with low double digits in 2025.
David Roberts: We continue to anticipate that parking solutions revenue will be about flat with 2024 levels. We expect SaaS revenue to grow low to mid-single digits offset by a decline in installation and professional service revenue on roughly flat product sales.
David Roberts: Any variability is expected to come from commercial services and specifically rack-tolling contingent and TSA part.
David Roberts: Historically, in the combined CS business, the first quarter is forecast to be our lowest revenue generating quarter followed by sequential revenue increases in the second and third quarter followed then by our revenue decline in the fourth quarter as the summer as the summer driving season comes to a close.
David Roberts: However, given the current economic uncertainty, these trends may play out differently in 2025.
David Roberts: Other key assumptions supporting our Adjusted EPS and FreeCasual Outlook can be found in
David Roberts: Before we close out, I'd like to give you an update on our ongoing ERP implementation.
David Roberts: I am pleased to report that the project is going well and the vast majority of processes are now lies in the new platform and the implementation is on schedule and on budget.
David Roberts: In closing, we're very pleased with our first quarter performance. We exhibited solid execution across the board and we're delivering strong free cash flow earnings.
David Roberts: As we head into the back half of 2025, we remain cautiously optimistic about our outlook and will be monitoring the economic environment and travel demand. Very close.
Speaker Change: This concludes our prepared remarks. Thank you for your time and attention today. At this time, I'd like to invite Michelle to start the Q&A session. Michelle, over to you.
Michelle: And that our first question comes from Nick Cremo with UBS. Your line is open.
Speaker Change: Thank you. Thanks for the great update and all the incremental color here.
Nick Cremo: First, just a quick one on the New York City contract. I realize you guys can't share any real details, but once the expectation is to when this contract will be finalized and when we'll have greater clarity on the impact on your business.
Speaker Change: Yeah, good question, Nick at David. I would say probably in the next...
16 and 90 days is probably a reasonable bet.
Speaker Change: Thanks for that. And then, I was hoping just to get a little incremental color on the attractive pipeline that you referenced in the prepared remarks you have.
Speaker Change: in Q2, and then also just any updates on the city-level RFP's going on in California if there was any updates there. Thank you.
Speaker Change: Yeah, I think what we've seen is the the activation of the TAM that we've worked really hard to do has translated to pipeline. We've been, you know, I think we are well ahead of where we hope to be from a pipeline and now it's really just a translation that pipeline to revenue.
Speaker Change: So our bookings are running ahead of our internal plan. California is going very well. We're waiting right now for some final updates from a couple of RFPs that we've submitted for San Jose and for Oakland, but overall, we feel very good about our position there.
Thanks very much.
Speaker Change: Thank you. Our next question comes from Daniel Moore with CGS Securities. Your line is open.
Daniel Moore: Thank you, David and Craig. Good afternoon. Thanks for taking questions.
Speaker Change: I think you probably covered this, but just parsing the updated commentary around guidance.
Speaker Change: Are you seeing travel and commercial services revenue slow in real time and that's causing you to point to the low end or is it more just the anticipation of software volumes, perhaps in the back half of the year, given some of the revised outlooks from the airlines.
Speaker Change: Hey, Andy, thanks for the question. This is Craig. I see exactly where you're coming from.
Speaker Change: and I think it's more of the latter than the former, but the-
Let me contextualize it this way, as we exited
Walnut, let me try having planned it.
Speaker Change: It's a 2% growth versus last year if we're looking level a little over the year. As I look out today, we ended the quarter, Q1 at about 101% April was right around that level. May is trending a bit lower. So the short answer I would say is we're starting to see a very small decline, but not big enough to say anything that I would call material. So as I think about the back half of the year though, we look at some of our peers and some of the other market participants that they would know.
Speaker Change: You know, we don't exactly know what we don't know, so the way that we've thought about the guy it is.
Speaker Change: We're okay at call it flatish type demand from this point forward to the balance of the year and maybe even the point or two worse than that but if it goes further than that we'll have to come back to you and I think that's really in line with what we've seen here today and what we've heard from other market participants.
Now that helps.
Speaker Change: Growth continues to comfortably outpace TSA volume growth, and I recognize that travel volumes might be a little lower, but is that a trend you expect to continue for the balance of the year, that sort of outperformance versus the market?
Speaker Change: That's always the tough one. And I fully appreciate the question. I understand what you're getting at there. And here in terms of the reason is
for the simple reason that the TSA covers.
Speaker Change: the entire country and the entire country doesn't have told us, right? So I think as I said, four, five states make up.
Two-thirds [inaudible]
Speaker Change: on some quarters as high as 80% on other quarters of our revenue. So it's all about if that travel is going to be down or up in the areas where Verra Mobility does the most business. So I have to take that kind of as it comes, but I can't look forward and anticipate that at this time.
Speaker Change: Understood. One more and I'll jump back and queue. Government solutions, obviously, nicely continued growth in RFPs and pipeline. You know, this has been a little bit of an investment or set up here in that business.
Speaker Change: How should we kind of think about the opportunity for margin expansion, you know, maybe not specifically 26? I don't, I need to want to get into that. But beyond over the next, you know, call it 123.
years. And thanks again for- for-
Speaker Change: Yeah, I mean, I think what you see is with all the tan that we mentioned, and that's just keep pilot in California.
Speaker Change: 159, I think, just the last couple of years going up to 300, so...
Speaker Change: You would say that relative to a tailwind, but that is about as good of a tailwind as you can have inside of that business which is we have a market leadership position and an expanding market with new opportunities as well as expanding use cases. This is so.
Speaker Change: I would say that the next couple of years based on both the pipeline as well as the work we've done to sort of lay the groundwork from a legislative perspective, such a stuff really, really well in that business.
Speaker Change: Thank you. Our next question comes from Louis DiPalma with William Blair. Your line is open.
Thank you, everyone.
Speaker Change: David, Craig, and Mark, good afternoon, and congrats on the preliminary New York City renewal.
Thanks, Louis.
Um...
for David.
Speaker Change: As you are well aware, one of the major autonomous vehicle fleet operators has a major facility in your neighborhood of Mesa. It seems autonomous vehicles have been making significant strides.
Speaker Change: Recently on different earnings calls and roll-outs in different cities. For the long term, what are your thoughts on driverless fleet operators being like potential like towing partners of yours?
Speaker Change: Yes, so if you drive around the city Phoenix, you'll definitely see some unique camera-laden cars that are no driver and people in the back.
Speaker Change: You know, I think one is while there is certainly some, you know,
Speaker Change: I think autonomy has actually made some nice traction last couple of years after being really silent or not growing to what people had thought.
Speaker Change: He still has over 200 million vehicles in the United States that are being driven today that do not have any autonomy.
Speaker Change: So I still think that's a longer way out relative to significant impact.
Speaker Change: You know, we're really focused on developing partnerships with the car manufacturers so that we can embed our technology with them and so that I would say that as we think about the longer term feature, it's probably in partnership with the manufacturers.
That makes sense. And secondly,
Speaker Change: You have disclosed the camera photo enforcement bookings for the past five quarters and
Speaker Change: I was wondering how should we think of how a camera backlog has built in terms of cameras that are under contract, that are awaiting installation. And related to this,
Speaker Change: How should we think of any potential churn whether temporary or permanent that may have taken place such as trying to connect the dots between all the AR that you've added and your future revenue?
Speaker Change: Yeah, Louis, this is Craig, I'll take a crack at that one.
Speaker Change: I would think of that camera backlog a lot like we talk about the ARR backlog and the one thing I would remember on that one is it takes 12 to 18 months for that to translate into revenue.
Speaker Change: Even the long-range of short-term or the shorter-end of medium-term view, that's a great way to think about it.
Speaker Change: I think the number that we kicked out of the prepared remarks was $52 million of ARR growth over the TTM period. And then if you kind of compare that to the overall consolidated revenue of government solutions, you get an idea.
Speaker Change: You get an idea of what that revenue looks like and if anything we've continued to see that, we've continued to see that accelerate.
Speaker Change: Okay, and so, are you, is one able to just add that 52 million of ARR to your, your current ARR to get your future ARR?
Speaker Change: Short answer is yes, the slightly longer answer is, you can't do it for the next 90 days or for the next 12 months specifically, but over the next 12 to 18 months, that's what that reported number means.
that is over the last 12 months.
Speaker Change: We've signed up new customers that will generate a $52 million of annual recurring revenue. And I think on your second question, I want to make sure I come back to answer exactly what you asked.
Speaker Change: On the second question, in terms of turn, this is a 97-98% renewal business. It's been that way for quite some years and it's stayed that way today. So our stick rate on these cameras is very high.
Speaker Change: You know, analysts also think that, how does that influence your thinking on your long-term leverage target, Craig?
Speaker Change: Yeah, I'd say the best indication of that is let's look at what happened in the past, right? So when we went out for investor day and wow, this was 2022, that's credible. Four years ago, you know, I was right.
Speaker Change: You're telling me, Lily. We were three and a half times, and that leverage was the target leverage for the company.
Craig Zindler, Craig Conti, David Roberts
Speaker Change: for a company that generates low, you know, to mid 40% conversion of free cash load or just
Speaker Change: Still makes sense, but we will absolutely re-snap that chalk line in response to wherever the macro environment is at the given time. We've done in the past and we would do it again. We're not in that space today, Louis, but certainly in something that we'll keep an eye on.
Great.
Thanks for all the questions. Thanks everyone.
Thank you.
Speaker Change: Thank you. Our next question comes from David Koning with Baird. Your line is open.
David Koning: Yeah, hey guys, great job. And I guess, first of all, commercial services that the presentation shows guidance, still, high single digit growth. And I'm wondering,
David Koning: If that does weaken in towards the low end of total guidance, do you still mean for that to be the lower end of high single digits or if it weakens would it be a little less than high single digits?
Speaker Change: I think it'd be a little less than high-single vision, Dave. It's my guess today. Right where we sit today, you know, we're on the cusp, so if travel were to slow, and it were to slow in the space that are most material to Verra Mobility, then that would likely drag that growth rate down with it.
Speaker Change: Yeah, okay. And then secondly, it seems like super high quality earnings. This quarter, you look through the press release, you didn't add hardly anything back anymore in terms of like transition costs. And it looks like you called out on the call.
Speaker Change: Something that shows up in the cash list, David, about 8 million of bad debt expense, I think that you included in your numbers, I believe, and just maybe talk through that, and maybe what that was, and then it seems like next year's setting up well, because you want to be ERP, you won't have this, most likely, etc.
Speaker Change: Yeah, so the one that we called out, well, thank you for that observation. The one that we called out in our script was simply some H bad death at commercial services. This was more an accounting reconciliation thing than anything else I wouldn't equate it to. Thank you.
Speaker Change: Current operations and any way she performed and it was relatively small. One thing we've really tried to do is we're really sparse on what we spike out here.
Speaker Change: and we have a lot of internal processes to make sure what the end up on our adjusted list is something that is commonly adjusted for other places in the market.
Dave: So I appreciate you calling out that's clean. Remind me I'm sorry, Dave, will you second part of your question?
Speaker Change: Yeah, just next year it seems like something's like the ERP conversion, maybe some of this bad debt expense, etc. falls off and sets up for nice expansion.
Speaker Change: You know what should? It should. It all depends. You know, we've got a contract negotiation ongoing as David mentioned in his prepared remarks. We'll see what traveled us here in the back half still looks like it's okay right now, but for sure we've got a handful of millions of dollars that we spent on the ERP this year, which again is going very well, that will not be there next year.
Speaker Change: So, all else being considered constant, I would say you're right.
Yeah, great. Thanks guys. Good job.
Thank you.
Speaker Change: Thank you as a reminder to ask a question, please press star 11.
Speaker Change: Our next question comes from Keith Housum, with North Cross Research. Your line is open.
Speaker Change: Hey, thanks guys for taking my questions. This is Rodney McFall on for Keith Housum today. So I'm just curious, what initial steps you guys are taking in T2 to improve that business since the management change and did that contribute to growth at all in the quarter? Thanks.
Speaker Change: Yeah, I mean, it was a small growth, but it was definitely in the right direction. I think what the manager team has done is really gotten their arms around the business and the customers.
Speaker Change: We reinvigorated our commercial leadership as well as our execution there, I think by using the Verra Mobility operating system to help to deploy some really good metrics in KTHI's and kind of a cadence of discipline behind it, it's really turned into a good story one that we're really excited about for the future.
Speaker Change: Got it. Got it. And then just a quick follow up. Looking at the potential for lower travel demand. Is there any color around how exposed you are to international travel versus domestic travel? Like I'm, I mean I'm assuming that that you know most of. Um.
Speaker Change: You know, the benefits that you guys get from travel is domestic, but just curious if you guys had any color on international travel as well. Thanks.
Speaker Change: Yeah, it's really, we'd probably look at just sort of gross TSA numbers as are.
Roborometer, I mean, certainly. Thank you.
Speaker Change: It coming down will have some impact, but we sort of look more domestically because
Speaker Change: Basically, there's about five states where all the tolling activity is, and we really are looking at travel inside those states, not necessarily people coming from...
Speaker Change: out of the country to someplace else. That's right. Rodney, I just had one thing on that. When you're in the market listening to other markets, it spends a lot of time, especially airlines, like say airlines, is when they talk about international travel, a lot of times that commentary is on the outbound international travel. For Verra Mobility, it would be more on the inbound international travel.
Speaker Change: Right, so but at the end of the day, as we think about travelers, we're not thick to where that travel we're actually came from is just our folks at the airport because that translates to folks at the car rental company.
Got it, understood. Thank you. That's all the questions I have.
Speaker Change: Thank you. I was trying to know for the questions at this time. This does conclude the question in the intercession. Thank you for your participation. You may now disconnect. Everyone, good day.