VERRA MOBILITY Corp (VRRM) Risk Factors

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, Competition, and Vendors

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Negative industry and macroeconomic conditions, including the impact of government actions and regulations, such as tariffs, trade protection measures, or a government shutdown, may materially and adversely impact our business, financial condition, and results of operations.

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Our Commercial Services and Government Solutions segments have several large customers, including NYCDOT, that account for a significant portion of our revenue, and a reduction in demand, materially different terms or pricing in new or amended agreements, or loss of one or more of such customers could have a material adverse effect on our business.

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Our contract with NYCDOT, which comprises a material portion of our revenue, expired on December 31, 2025, and we entered into a new contract, effective January 1, 2026. The terms of the new contract are materially different than our prior contract with NYCDOT, including service level agreements, service credits, liquidated damages, cybersecurity, and subcontracting requirements. If we do not successfully perform pursuant to the contract terms, this could have a material adverse effect on our business, financial condition, and results of operations.

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

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

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Our use of AI, including risks related to its design, development, deployment, and use, as well as regulatory uncertainty, data privacy and cybersecurity risks, and reliance on third-party providers, could have a material adverse effect on our business.

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

Risks Related to Our Acquisitions

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

Risks Related to Data Privacy and Cybersecurity

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A failure in or compromise 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

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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

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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

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

Risks Related to Our Class A Common Stock

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We cannot guarantee that our stock repurchase programs will enhance long-term shareholder value.

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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, Competition, and Vendors

Negative industry and macroeconomic conditions, including the impact of government actions and regulations on our customers or us, may materially and adversely impact our business, results of operations, and financial condition.

We provide smart mobility technology solutions to customers in our Commercial Services, Government Solutions, and Parking Solutions business segments. Accordingly, the demand for our products in the past has been, and in the future may be, impacted by industry and macroeconomic trends and conditions impacting our customers, including seasonality, demand for business and leisure travel, changes to or disruptions in governmental budgeting, reductions in the level of air travel, higher airfare costs, energy shortages, and cost increases, international, national, and local economic conditions and cycles, as well as other factors affecting travel levels, such as military conflicts, terrorist incidents, natural disasters, epidemic diseases, or government shutdowns. For example, our Commercial Services segment may be impacted by travel demand and extreme weather events which may affect overall travel demand in the United States. Our Government Solutions segment may be impacted to the extent our customers experience a reduction in political acceptance of, or additional government restrictions on, automated safety programs. Our Parking Solutions segment may be impacted to the extent our customers see an increase in usage of public transportation, rideshare, or autonomous taxi services, all of which may cause a decrease in parking usage. Furthermore, uncertain economic conditions may make it more difficult for us to raise funds through borrowings or private or public sales of debt or equity securities. We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry.

Government actions and regulations, such as tariffs and trade protection measures, may negatively impact our business. To minimize tariff impact, we have, at times, shifted manufacturing and final assembly locations and our sourcing teams prioritize domestic alternatives when feasible. Future changes to United States tariff policy, including the expansion of existing tariffs, elimination of exclusion programs, retaliatory measures by foreign governments, or changes to preferential trade programs, could further increase our costs, and could have an adverse impact on our results of operations. Because many tariff actions may be implemented with limited advance notice, our ability to mitigate the impact of such actions may be constrained.

In addition, consumer spending and activities may be materially adversely affected in response to financial market volatility, negative financial news, changes to or disruptions in governmental budgeting processes or amounts, conditions in the real estate and mortgage markets, declines in income or asset values, energy prices, labor and healthcare costs, and other economic factors, all of which may have a negative effect 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.

Negative conditions in the general economy, both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, financial and credit market fluctuations, international trade relations, government shutdowns, pandemics, political turmoil, natural catastrophes, warfare, and terrorist attacks on the United States or elsewhere, could negatively affect customer demand and the growth of our business.

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Our Commercial Services and Government Solutions segments have several large customers, including NYCDOT, that account for a significant portion of our revenue, and a reduction in demand, materially different terms or pricing in new or amended agreements, or loss of one or more of such customers could have a material adverse effect on our business.

Our business experiences varying levels of customer concentration. For example, in our Government Solutions segment, NYCDOT represented approximately 17.9% and 15.8% of our total revenues for the years ended December 31, 2025 and 2024, respectively. Our contract with NYCDOT expired on December 31, 2025, and we entered into a new contract with NYCDOT, effective January 1, 2026, to manage New York City’s automated enforcement camera safety programs for a five-year period. The terms of the new contract are materially different than our prior contract with NYCDOT, including service level agreements, service credits, liquidated damages, cybersecurity, and subcontracting requirements. If we do not successfully perform the contract pursuant to its terms, it could have a material adverse effect on our business, financial condition, and results of operations. We may continue to rely on a small number of customers in our Government Solutions segment to represent a significant portion of our total revenues in any given period. The loss of any of our top Government Solutions customers could have a material adverse effect on our business, financial condition, and results of operations.

We also experience customer concentration in our Commercial Services segment. Three of our Commercial Services customers collectively accounted for 34.8% and 36.0% of our total revenues for the years ended December 31, 2025 and 2024, respectively. If any of these customers were to reduce their demand, their demand fluctuates, or one or more of these customers terminates or fails to renew their agreements with us, or the renewal agreement has materially different terms or pricing than the existing agreement, it would have a material adverse impact on our business and results of operations.

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

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, 2025, NYCDOT had an open receivable balance of $72.9 million, which represented 31.1% of our total accounts receivable, net.

Government entities typically finance projects through appropriated funds. While these projects are often planned and executed as multi-year initiatives, government entities usually reserve the right to change the scope of, delay, or terminate such projects due to a lack or reduction of approved funding, including as a result of reductions in federal funding that may impact the availability or timing of appropriated funds, or for convenience. Furthermore, we may be required to perform work under expired or terminated government contracts and may be restricted from recognizing revenue from such contracts. Changes in government or political developments, including administrative hurdles, constitutional challenges, 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. For example, in November 2025, the province of Ontario, Canada enacted legislation banning automated speed enforcement cameras, which led to our Company exiting the province.

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 termination for convenience, 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. We may also be subject to differing or contrary policy preferences or requirements among our government customers which could result in a loss of government customers if we are unable to satisfy such potential differing requirements or preferences to the satisfaction of such customers.

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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 could include termination, forfeiture of profits, suspension of payments, fines, penalties, sanctions, and suspension or debarment from doing business with government entities in the future. This includes penalties under the federal False Claims Act or similar state laws, for reasons such as, but not limited to, inaccurate billing, improper coding, or the actions of third parties acting on our behalf. For example, in 2020, after we discovered issues in our system installation practices under our agreement with NYCDOT, NYCDOT investigated the matter and we undertook significant efforts to remediate past installations. If penalties or other restrictions are imposed in one jurisdiction, they could implicate similar provisions in contracts with other government customers. Furthermore, negative publicity related to these penalties, sanctions, or findings 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, speed limit, school bus, and bus lane laws. From time to time, we make significant capital and other investments to attract and retain customers, including investments in information technology equipment, the construction and installation of photo enforcement systems, and the development and implementation of software and labor resources. In 2025, revenues from this segment represented approximately 47% of our total revenues. Accordingly, our business depends on national, state, and local governments authorizing the use of automated photo enforcement and not 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 November 2025, the province of Ontario, Canada enacted legislation banning automated speed enforcement cameras, which led to our Company exiting the province.

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 toward, automated enforcement, or as a result of one or more scandals related to its use.

Similarly, our Commercial Services business could be materially adversely affected by an unfavorable shift in political support for, or public sentiment toward, tolling, or by material restrictions or limitations on its use, including through the imposition of limits on the fees RACs may charge 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, 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 relationships 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, contract renewals, 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 with whom we do not currently compete. This includes advancements in the area of self-driving vehicles, which may significantly reduce the frequency of vehicles illegally running red lights, exceeding posted speed limits, or requiring parking, as well as AI-enabled tools, which may allow for new or more efficient competing solutions. Moreover, we face competition from our own customers as they may choose to invest in developing their own internal solutions.

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Some of our existing competitors and potential new competitors have longer operating histories, greater name recognition, less debt, more established customer bases, or 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 (including AI), 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 set-up 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 acquisitions 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, expand, and engage our customer base and to increase revenue depends, in large part, on our ability to continue evolving our existing solutions and developing successful new solutions. We may introduce significant changes to our existing solutions or acquire, develop, or introduce new and unproven products and services, including through the use of emerging technologies, such as AI, or by entering markets or industries in which we have limited experience. For example, as Government Solutions customers increase requirements related to data security, privacy, and IT architecture, we have invested significant effort and expense to develop new solutions to meet these evolving requirements, and such efforts may not be successful. Modifications to existing solutions or the development of new solutions can be costly, may be subject to regulatory requirements, and require significant research and development, time, expense, and human capital, and may not result in successful commercialization or customer adoption. 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 sell or 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.

Risks related to the development, deployment, and use of AI, together with an evolving and uncertain regulatory environment, may increase costs, create liability, and adversely affect our business, financial condition, results of operations, and reputation.

Our products, services, and business operations increasingly incorporate AI, and we continue to invest in the expansion of our AI capabilities, including through enhancements to existing, and development of new, AI-enabled features and functionality. AI technologies are complex, rapidly evolving, and may require significant ongoing investment to develop, maintain, and deploy effectively. There can be no assurance that our AI initiatives will improve our offerings, efficiency, or profitability. Our use of AI systems may result in delays, increased costs, technical failures, defects, bugs, vulnerabilities, governmental or regulatory scrutiny, litigation, confidentiality or cybersecurity risks, privacy concerns, ethical challenges, inaccurate, incomplete, misleading, biased, or otherwise flawed outputs, operational risks, or other challenges that could impair market acceptance, require remediation, or harm our reputation and financial results. Furthermore, our competitors or other third parties may incorporate AI into their products, offerings, and solutions more quickly or more successfully than we do, which could impair our ability to compete effectively.

We may rely on third parties for AI-related components, models, or infrastructure. We may have limited control over these parties’ practices, security, reliability, or compliance practices. If we, our vendors, or our third-party partners experience an actual or perceived cybersecurity incident because of the use of AI, we may lose valuable intellectual property, personal data, and confidential information. Any of these outcomes could damage our reputation, subject us to legal liability, result in the loss of valuable property and information, and adversely impact our business.

The use of AI tools by our workforce, whether authorized or unauthorized, may increase risks related to data protection, cybersecurity, disclosure of confidential information, and the misuse of our or third-party intellectual property, including customer data. Although we implement measures designed to help govern use of AI by our workforce, AI tools may present risks of third-party intellectual property claims, unauthorized access to or use of proprietary information, or failure to comply with applicable open-source software requirements.

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Governments and regulatory bodies, including in the United States and Europe, are taking an increasingly active role in addressing developments in AI, including through the issuance of risk-mitigation action plans and the introduction of legislation to oversee the use of AI. New or evolving AI regulations may limit or restrict how we use AI in our products and services and may require us to expend additional resources to tailor our offerings across jurisdictions with differing regulatory requirements. Compliance with global AI-related laws and regulations may increase our costs, require significant management and employee time, change our business practices, or cause us to not leverage certain AI technologies. Any actual or perceived failure to comply, or to satisfy other actual or asserted AI-specific or related obligations, could result in audits, investigations, enforcement actions, and significant fines or penalties, as well as claims or litigation, reputational harm, reduced demand for our products and services, and increased liabilities, any of which could adversely affect our business or financial results.

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

Many of the contracts and renewals for which we bid, particularly those for certain larger government customers, are extremely complex and require the investment of significant resources in order to prepare accurate bids and proposals. Further, a significant percentage of new customer growth opportunities and contract renewals or extensions in our business segments are only accessible through competitive bidding. Competitive bidding involves substantial costs and risks, including significant time and effort and the commitment of resources, regardless of whether a contract is ultimately awarded. For example, we invested significant time and resources to prepare our response for the competitive procurement for the new NYCDOT automated enforcement program contract. 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 reliance on third-party providers, including for access to government records of vehicle information, could have a material adverse effect on our business.

We rely significantly 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 reliable manner. For example, we rely on third parties to provide data sourced from state departments of motor vehicles (and their European equivalents) and other governmental agencies with which we do not have direct relationships for driver and other information we use in our business. Our access to such governmental data may be suspended, restricted, or terminated at any time, including as a result of changes in law or policy, contractual or licensing disputes, data-sharing moratoria, privacy or security concerns, system outages, or discretionary decisions by those agencies or their data service intermediaries. Any reduction, interruption, or loss of access to this data, or increase in prices for access to this data could materially and adversely affect our ability to offer our solutions and meet customer expectations and contractual commitments. 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 event 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, Parking Access and Revenue Control (PARCS) and parking enforcement hardware solutions, and our inability to access third-party providers could have a material adverse effect on our business.

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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 of our contractual obligations, or harm our reputation, any of which could have a material adverse effect on our business, financial condition, and results of operations.

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 services 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 a 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 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, delay, or failure of these services and systems could disrupt our operations, adversely affect our customers, harm our reputation, and cause us to miss or delay contractual obligations. These impacts could also result in litigation, reduced use and acceptance of our solutions, data loss, and significant costs and remediation efforts, any of which could materially adversely affect 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 dissatisfied with our products, services, or solutions, or with the timeliness or quality of our work, we may incur additional costs to address the issue, experience payment delays, suffer reduced contract profitability, or incur reputational harm that could impair our ability to win new business. Failure to properly transition new customers to our systems or existing customers to different systems, accurately budget transition costs, or estimate contract costs could result in delays and customer dissatisfaction. In addition, 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.

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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. Competition laws or foreign investment controls 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 but are not limited to:

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combining management teams, strategies, and philosophies;

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

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

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

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

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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, an 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.

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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, acquired assets, or 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.

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

We perform a goodwill impairment test for each reporting unit annually, or more frequently if indicators for potential impairment exist. Indicators that are considered include significant changes in performance relative to expected operating results, significant negative industry or economic trends, or a significant decline in our stock price, and/or market capitalization for a sustained period of time. In addition, we assess the current and future economic outlook for our reporting units during the fiscal year. While we believe the assumptions used in determining whether there was impairment and the amount of any resulting impairment were reasonable and commensurate with the views of a market participant, changes in key assumptions in the future, including increasing the discount rate, lowering forecasts for revenue and operating margin, or lowering the long-term growth rate, could result in additional charges; similarly, one or more changes in these assumptions in future periods due to changes in circumstances could result in future impairments in one or more reporting units. We recorded a $97.1 million impairment to goodwill in our Parking Solutions segment during fiscal year 2024 in connection with our assessment that the Parking Solutions reporting unit’s carrying value exceeded the estimated fair value and we cannot predict if or when additional future goodwill impairments may occur. Any future goodwill impairments could have material adverse effects on our operating income, net assets, or our cost of, or access to, capital, which could harm our business. See Note 2, Significant Accounting Policies, in Item 8, Financial Statements and Supplementary Data, for additional information.

Risks Related to Data Privacy and Cybersecurity

A failure in or compromise 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 that rely on our operational efficiency and the uninterrupted, accurate, and secure delivery of our services and information. We receive, process, transmit, and store substantial volumes of information relating to identifiable individuals, in our capacity as a back-end and direct-to-consumer service provider and as an employer, and we also receive, process, and facilitate financial transactions, including the disbursement of funds, which requires the handling of debit and credit card information. We also rely upon third-party providers such as subcontractors, software vendors, utility providers, and network providers 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 information systems and those of third parties with which we interact, including customers and government agencies, are critically important.

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Our cybersecurity and processing systems, and those of third parties with which we interact, may be damaged, disrupted, or otherwise compromised for a number of reasons, including power outages, computer or telecommunications failures, computer viruses, malware, or other destructive software, internal design, manual, or usage errors, cyberattacks, terrorism, workplace violence or other misconduct, catastrophic events, natural disasters, and severe weather conditions. Our visibility and role as a processor of transactions containing personally identifiable information may increase our risk of being targeted by threat actors, and we have experienced malicious cyberattack attempts in the normal course of our business and we expect we will continue to be subject to future attacks. We maintain insurance intended to provide coverage for certain losses arising from cybersecurity incidents; however, such coverage may be insufficient to cover all losses or all types of claims that may arise.

In addition, numerous and evolving cybersecurity threats, including advanced and persistent cyber-attacks, including the use of AI tools to aid such threats, phishing, and social engineering schemes could compromise our systems and the confidentiality, availability, and integrity of data in our systems, as well as the systems and data 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 cybersecurity incidents or system failures. See the section entitled, “Risks Related to Our Customers, Industry, Competition, and Vendors,” for additional information. Further, employee error or malfeasance, faulty password management, or other irregularities may result in a defeat of security measures or a cybersecurity incident. Although we devote significant resources to our cybersecurity programs and have implemented security measures that we believe are reasonable and appropriate to protect our systems and data and to prevent, detect, and respond to data security incidents, these efforts, as well as the efforts of third parties with which we interact, may not be sufficient to prevent these or other threats.

Moreover, because the techniques used to obtain unauthorized access to, or to disable or degrade, systems are continually evolving and have become increasingly complex and sophisticated, and may remain undetected for periods of time, we and the third parties with which we interact may be unable to anticipate, detect, or respond to such acts adequately or on a timely basis. 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 conduct due diligence of those of third parties.

If we are sued in connection with any cybersecurity incident or system failure, we may be subject to protracted litigation or significant settlement. In addition, a cybersecurity incident 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 have breached our contractual obligations, or decreased use and acceptance of our solutions. A cybersecurity incident or system 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 cybersecurity incident would also likely require us to devote significant management time and other resources to the response and follow-up to the incident. 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.

We use personal information in our operations and as an employer, and we process additional data—such as photographs and video recordings—that may be considered personal information or sensitive personal information in certain jurisdictions, including in connection with our Government Solutions, Commercial Services, and Parking Solutions businesses. 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. In addition, our handling of personal information is subject to our published privacy policies and notices, contractual obligations, and informed by industry standards.

Laws, regulations, and industry standards relating to privacy are rapidly evolving and subject to significant change, and may result in increasing regulatory and public scrutiny, as well as heightened levels of enforcement and sanctions. These laws and regulations may also be subject to new or different interpretations. For example, the California Consumer Privacy Act (“CCPA”), as amended, created 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 disclosures, and receive detailed information about how their personal data is processed. The law provides for civil penalties against companies that fail to comply.

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Many other states have also enacted privacy laws and several others have introduced privacy bills. The U.S. Congress also enacted several federal privacy bills in 2025 which protect personal information by limiting how it can be collected, used, shared, and exposed, and by strengthening safeguards and accountability for privacy harms. In addition, the FTC uses its consumer protection authority to initiate enforcement actions against companies relating to their use and disclosure of personal information, particularly in response to actual or perceived unfair or deceptive acts or practices.

Various U.S. state laws and regulations may also require us to notify affected individuals and state agencies in the event of a data breach involving personal information. Penalties for failing to adequately protect personal information or to provide required or timely notice vary by jurisdiction. In the United States, most state data breach notification laws consider violations to be unfair or deceptive trade practices and give the relevant state attorneys general the authority to levy fines or bring enforcement actions. Some laws, such as the CCPA, also grant affected individuals a private right of action for certain data breaches, with the CCPA also providing for statutory damages. Class action lawsuits against companies that experience data breaches involving personal information have become increasingly common and may result in significant damages or settlements. Foreign laws concerning personal information, privacy, and data security may be more restrictive and burdensome than those in the United States. Given that data is highly mobile and transferable, many foreign data protection and privacy laws assert broad extraterritorial application to conduct occurring outside the geographic boundaries of the relevant jurisdiction. For example, 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 imposes extensive privacy and data protection requirements, including robust compliance obligations for companies and their service providers, enhanced rights for individuals, significant documentation requirements for data protection compliance programs, restrictions on transfers of personal data to non-E.U. countries, and, in certain circumstances, prompt notification of data breaches to data subjects and supervisory authorities. The GDPR provides for administrative fines of up to €20 million or up to 4% of a company’s total global annual turnover for the preceding fiscal year, whichever is greater. In addition, our customers may, through contractual requirements, require us to comply with certain GDPR obligations regardless of whether the GDPR otherwise applies to our business.

Compliance with privacy- and data security-related laws, regulations, contractual requirements, and industry standards may involve significant costs and short implementation timelines, and may limit our ability to compete for new business, conduct business with certain government agencies (including existing customers), or continue to access certain data. These requirements may also limit the use or adoption of our smart mobility technology solutions and services, reduce overall demand for our offerings, slow revenue growth, subject us to fines or penalties, or result in breaches of contractual commitments to our customers. As these laws, regulations, and standards continue to develop in the United States and internationally, we may be required to expend significant time and resources in order to update existing processes or implement additional mechanisms to ensure compliance. Moreover, if our policies, procedures, or measures relating to these matters fail to comply with, or if regulators assert that we have failed to comply with, applicable laws, regulations, or industry standards, we may be subject to governmental enforcement actions, regulatory investigations, litigation, fines, algorithmic disgorgement, limitations on the use of previously collected personal information or the collection of new personal information, other penalties, and adverse publicity. In addition, our application providers, customers, and partners may lose trust in us or discontinue doing business with us. 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 that 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”).

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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 or 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 or requirements by the Payment Card Industry 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, as well as qualified and competent subcontractors, and competition for such personnel is intense. Our failure to attract, hire, integrate in a timely manner, or retain and motivate qualified personnel—particularly software development, product development, analytics, and other technical personnel—or our inability to engage qualified subcontractors could adversely affect our business and results of operations.

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 are subject to additional union organizing efforts, disagreements between us and labor representatives on matters of importance may result in strikes, work slowdowns, or other labor actions at 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, some jurisdictions require that we subcontract a certain percentage of our work to certified businesses and failure to do so may decrease our competitiveness in the marketplace, lead to breach of contract claims, or result in having to refund fees paid due to a failure to achieve committed targets. For example, our new contract with NYCDOT includes a minority- and women-owned business subcontracting participation goal. Additionally, 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.

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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 that include but are not limited to the United Kingdom, Netherlands, France, Ireland, Spain, Australia, Canada, Hungary, and India. The success of our business depends, in part, on our ability to successfully manage our 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:

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

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fluctuations in geopolitical relationships, which may impact our access to goods and services and our ability to contract with certain government entities;

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

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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;

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

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

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adverse tax consequences;

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fluctuations in currency exchange rates;

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complying with varying legal and regulatory environments, and managing public perception, in multiple foreign jurisdictions, including with respect to data and consumer privacy and payment processing, labor matters, and value-added tax (“VAT”), and unexpected changes in these laws, regulatory requirements, and the enforcement thereof; and

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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 affecting our international operations, and our strategies to address such risks may not successfully anticipate or mitigate issues that arise or enable us to expand 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, in part, expanding our global footprint, which may involve moving into regions and countries beyond those in which we currently operate. To achieve widespread acceptance in new markets we may enter, we may be required to develop new products and services or adapt our existing offerings to address market-specific customs, cultural norms, 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:

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lack of acceptance of our products and services;

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

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

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

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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

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

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

In many cases, we may have limited or no prior experience in regions or countries where we seek to launch operations. In addition, understanding local customs and cultures, particularly consumer preferences, differing technology standards, and language barriers, may be challenging. Our failure to do so effectively could slow our growth in those regions or countries. In many such markets, long-standing relationships between potential customers and local partners, protective regulatory regimes (including local content requirements and approval processes), and disparate country-specific networks and systems may create barriers to entry. Adverse conditions in foreign financial markets or economies, or challenges faced by foreign financial institutions—particularly in emerging markets—may reduce demand in the affected regions. 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. 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 markets, 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 anti-corruption, anti-bribery, and anti-money laundering laws and regulations in multiple jurisdictions, both within the United States and internationally, many of which are evolving, including the Foreign Corrupt Practices Act (the “FCPA”), the U.S. domestic bribery statute under 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, such as the United Kingdom Bribery Act 2010. Our businesses are 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 internationally, 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 our 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.

Numerous countries, including a number of those in which we do business, have agreed to a statement in support of Economic Co-operation and Development (“OECD”) model rules that propose a global minimum tax, which if adopted, and subject to any “protective measures” implemented by the United States and responses thereto, may increase and negatively impact our provision for income taxes.

Numerous countries, including a number of those in which we do business, have agreed to a statement in support of the OECD model rules that propose a global minimum tax rate of 15% that would apply to multinational companies with consolidated revenue above €750 million. Many jurisdictions, including E.U. member states and other non-U.S. countries, have enacted or are in the process of implementing legislation consistent with these rules.

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On January 5, 2026, the OECD published administrative guidance which introduced a number of exclusions from the global minimum tax rules. One of the exclusions, generally referred to as the side-by-side safe harbor (the “SbS Safe Harbor”), represents the culmination of months of negotiations with the United States to remove U.S.-parented groups from the scope of the global minimum tax rules. Under the SbS Safe Harbor, a multinational group whose parent is located in a jurisdiction that is listed in the OECD Central Records as having a “qualified SbS regime” may elect out of the imposition of additional tax under the global minimum tax rules, including the group’s constituent entities and joint ventures in any jurisdictions. As of January 5, 2026, the United States was the only jurisdiction listed as having a qualified SbS regime. The SbS Safe Harbor must be implemented into domestic law but generally is expected to be enacted by the United States with retroactive effect to January 1, 2026.

Even if a multinational group has a parent located in a jurisdiction that is a qualified SbS regime, the non-U.S. operations of such group still will be subject to any applicable jurisdiction’s qualified domestic minimum top-up tax (“QDMTT”). A QDMTT is an additional tax imposed under the global minimum tax rules by a specific jurisdiction on otherwise low-taxed profits generated within its own borders. Under the global minimum tax rules, applicable jurisdictions must impose a QDMTT on a consistent and non-discriminatory manner to all multinational groups operating within their borders. As such, the effect of the SbS Safe Harbor is that while global minimum tax rules may result in increased taxes in the jurisdiction in which the profits arise as a result of any QDMTT imposed by that jurisdiction, these profits should not be subject to alternative or additional global minimum taxes in other jurisdictions in which a multinational group that qualifies for the SbS Safe Harbor operates.

As global minimum tax rules become effective or are expanded in jurisdictions in which we operate, we may be subject to increased income tax expense, reduced tax attributes, additional compliance and administrative costs, and increased complexity in tax reporting and financial statement accounting. These developments could adversely affect our effective tax rate, provision for income taxes, cash flows, and results of operations. We will continue to monitor legislative, regulatory, and administrative developments relating to the global minimum tax regime, including changes in interpretation, enforcement, or coordination among jurisdictions, and evaluate their potential impact on our business, financial condition, and results of operations in future periods.

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 non-disclosure agreements and other contractual protections. 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 use are registered in every jurisdiction in which we operate, and we may not be able to obtain or maintain registration or enforce our intellectual property rights in all such jurisdictions. The process of acquiring intellectual property protection can be lengthy, expensive, and uncertain. Applications we submit for trademark or patent protection may not be granted, and any applications that are granted may be challenged, invalidated, or circumvented by others. While we make efforts to acquire rights to intellectual property necessary for our operations, such efforts 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 business. 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 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.

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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, all of which may have a material adverse effect on our business, financial condition, and results of operations. Furthermore, we may be counter-sued by an alleged infringer when we attempt to enforce our intellectual property rights, which may materially increase our costs and result in injunctive or financial damages being awarded against us.

We have been, and may in the future become, subject to third-party claims alleging infringement or challenging the validity of our intellectual property, which could have a material adverse effect on our business, financial condition, or results of operations.

We have faced, and may in the future face, claims alleging infringement, misappropriation, or other violations of intellectual property rights by third parties in the jurisdictions in which we operate or seek 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. Many of our agreements with our distributors and other customers require us to indemnify them for certain third-party intellectual property infringement claims. Discharging our indemnification obligations may involve time-consuming and costly litigation and could result in substantial settlements or damages awards, injunctions affecting our products, and the loss of a distribution channel, any of which could have a material adverse effect on our business, financial condition, and results of operations. If such claims are resolved against us, or against a third party we are required to indemnify under license or other contractual arrangements, we could be required to pay damages, develop or adopt non-infringing products or services, or obtain a license to the intellectual property at issue, which may not be available on commercially reasonable terms or at all.

Defending or settling such claims could require the expenditure of significant additional resources, and could result in adverse publicity, even if the claims are ultimately resolved 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 $687.1 million outstanding under our first lien term loan facility as of December 31, 2025. Additionally, pursuant to an indenture, VM Consolidated issued an aggregate principal amount of $350 million in Senior Unsecured 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 Amended Revolver (defined below) by up to $75.0 million, all of which would be secured. We also have the ability to add one or more incremental term loan facilities or incremental revolving credit facilities or increase the amount of our Amended Term Loan (defined below), in each case by an unlimited amount, subject to obtaining additional commitments from lenders and the satisfaction of a maximum first lien, secured or total net leverage ratio or minimum fixed charge coverage ratio, on a pro forma basis, all of which may 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:

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increase our vulnerability to adverse economic and industry conditions;

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

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

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require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for operations and other purposes;

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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;

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

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

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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

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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, and change the nature of the business we conduct.

Under our Amended Term Loan, we could be required to make periodic prepayments based on excess cash flow (as defined by the Amended and Restated Term Loan Agreement, defined below) thereby limiting the amount of cash flow that can be reinvested in our business. Under our Amended Revolver, 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 Amended Revolver, which under certain circumstances could 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 and services 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 Amended and Restated Revolving Credit Agreement (defined below) or otherwise, may not be able to repay the amounts due under the agreements governing our indebtedness, and may not be able to make cash available by dividend, debt repayment, or otherwise. In addition, if we are unable to pay the amounts due under the Amended Term Loan, our lenders could proceed against the collateral securing the indebtedness under the Amended Term Loan, which consists of substantially all of our assets. Any of the foregoing could have material adverse effects on our financial position, results of operations, or cash flows and could cause us to become bankrupt or insolvent.

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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 Amended and Restated 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 successfully implement 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.

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

We cannot guarantee that our stock repurchase programs will enhance long-term shareholder value. Stock repurchases may also increase the volatility of the trading price of our stock and diminish our cash reserves. In addition, Congress enacted the Inflation Reduction Act in 2022, which, among other provisions, provides for a 1% excise tax on net stock repurchases.

In October 2023, our Board of Directors authorized a share repurchase program for up to $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period through open market purchases, in privately negotiated transactions or by other means, including trading plans intended to qualify under Rule 10b5-1 of the Exchange Act, and accelerated share repurchase (“ASR”) agreements. Under this program, we repurchased 2.0 million shares for $51.5 million in June 2024 through a privately negotiated transaction and approximately 1.5 million shares for $35.8 million in open market transactions during the fourth quarter of 2024. In December 2024, our Board of Directors authorized an additional $100.0 million under the program, resulting in approximately $112.7 million available for repurchases. On December 11, 2024, we entered into an ASR agreement for $112.7 million, pursuant to which we received and retired an aggregate of 4.5 million shares of Class A Common Stock upon final settlement on March 3, 2025. All repurchased shares were subsequently retired. We paid a total of $200.0 million for share repurchases during the year ended December 31, 2024. In addition, we recorded approximately $1.7 million within accrued liabilities related to the excise taxes payable on net share repurchases on the consolidated balance sheets as of December 31, 2024, which has been paid as of June 30, 2025. The prior repurchase authorization expired on April 30, 2025.

On May 17, 2025, our Board of Directors authorized a new share repurchase program to repurchase up to an aggregate amount of $100.0 million of our outstanding shares of Class A Common Stock over an 18-month period in open market, ASR, or privately negotiated transactions. On October 23, 2025, our Board of Directors authorized the repurchase of up to an additional $150.0 million of our outstanding shares of Class A Common Stock under the existing share repurchase program, providing the Company with an aggregate $250.0 million available for repurchases. During the fourth quarter of fiscal year 2025, we paid $133.4 million to repurchase 6,028,853 shares of our Class A Common Stock in open market transactions, which shares we subsequently retired. In addition, we recorded approximately $1.3 million within accrued liabilities related to the excise taxes payable on net share repurchases on the consolidated balance sheets as of December 31, 2025.

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

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

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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;

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

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

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

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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 of Directors 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;

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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 Class A Common Stock; and

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advance notice procedures that stockholders must comply with in order to nominate candidates to our Board of Directors 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 an 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.

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. 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 make distributions or loans to enable us to pay any dividends on our Class A Common Stock or satisfy our other financial obligations.

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 agreements governing our indebtedness and will be subject to the negative covenants set forth therein. Any loans or other extensions of credit would be subject to the restrictive covenants under such agreements.

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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.

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 of Directors, 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 customers, and may affect our relationships with current customers, 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 of Directors. The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities.

General Risk Factors

If we fail to maintain an effective system of internal controls or identify a material weakness or significant deficiency in our internal control over financial reporting, our ability to report our financial condition and results of operations in a timely and accurate manner could be adversely affected, investor confidence in our company could diminish, and the value of our securities may decline.

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.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. While we continually undertake steps to improve our internal control over financial reporting as our business changes, we may not be successful in making the improvements and changes necessary to be able to identify and remediate control deficiencies or material weaknesses on a timely basis.

During fiscal year 2023, we identified a material weakness in the design and operation of our internal controls over financial reporting in the Control Activities component of the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) framework related to the lack of information technology general controls to prevent the risk of management override. Based on the implementation work and the results of testing performed, our management concluded that the previous identified material weakness was remediated as of December 31, 2024.

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.

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

From time to time, and as further discussed in the section entitled “Legal Proceedings,” 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, antitrust claims, 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 or our customers, deceptive trade practices, claims related to compliance with laws or our contractual requirements, invoicing, personal injury claims, claims related to licensing, 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 may be commenced at the initiative of a 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, all of which subject us to governmental and regulatory oversight. 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.

Any potential 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. Increasing regulatory burdens and corporate governance requirements could increase our legal and financial compliance costs and the amount of time management must devote to governance and compliance activities.

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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 and Parking Solutions segments are also subject to laws related to the use of automated traffic enforcement or parking enforcement and the capture, access, and retention of data, and matters related to government contracting. Our Commercial Services segment may be impacted by laws related to the fees RACs may charge customers for tolling or violation processing services.

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 that 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 publicity, or otherwise have a material adverse effect on our business, financial condition, and results of operations.

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:

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

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

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tax effects of stock-based compensation;

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costs related to intercompany restructurings;

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

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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 a material adverse effect on our financial condition and results of operations.