Verra Mobility Corp (VRRM) 2023 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Verra Mobility First Quarter 2023 Earnings Conference Call. (Operator Instructions) This call is being recorded on Thursday, May 4, 2023. I will now turn the conference over to Mark Zindler, Vice President, Investor Relations. Please go ahead.

女士們先生們，下午好，歡迎來到 Verra Mobility 2023 年第一季度收益電話會議。 （操作員說明）此電話將於 2023 年 5 月 4 日星期四進行錄音。我現在將會議轉交給投資者關係副總裁 Mark Zindler。請繼續。

Thank you. Good afternoon, and welcome to Verra Mobility's first quarter 2023 earnings call. Today, we'll be discussing the results announced in our press release issued after the market close. With me on the call are David Roberts, Verra Mobility's Chief Executive Officer; and Craig Conti, our Chief Financial Officer. David will begin with prepared remarks, followed by Craig, and then we'll open up the call for Q&A.

謝謝。下午好，歡迎來到 Verra Mobility 的 2023 年第一季度財報電話會議。今天，我們將討論收市後發布的新聞稿中公佈的結果。與我通話的還有 Verra Mobility 的首席執行官大衛·羅伯茨 (David Roberts)；和我們的首席財務官 Craig Conti。 David 將首先發表準備好的評論，然後是 Craig，然後我們將開啟問答環節。

During the call, we'll make statements related to our business that may be considered forward-looking, including statements concerning our expected future business and financial performance, our plans to execute on our growth strategy, the benefits of our strategic acquisitions, our ability to maintain existing and acquire new customers, expectations regarding key operational metrics and other statements regarding our plans and prospects.

在電話會議期間，我們將發表與我們的業務相關的前瞻性聲明，包括有關我們預期的未來業務和財務業績、我們執行增長戰略的計劃、我們戰略收購的好處、我們的能力的聲明維護現有客戶和獲得新客戶、對關鍵運營指標的期望以及關於我們的計劃和前景的其他聲明。

Forward-looking statements may often be identified with words such as we expect, we anticipate or upcoming. These statements reflect our view only as of today, May 4, 2023, and should not be considered our views as of any subsequent date. We undertake no obligation to update or revise any forward-looking statements.

前瞻性陳述通常可以用我們預期、我們預計或即將到來等詞語來識別。這些陳述僅反映我們截至今天（2023 年 5 月 4 日）的觀點，不應被視為我們在任何後續日期的觀點。我們不承擔更新或修改任何前瞻性陳述的義務。

Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of other -- for a discussion of material risks and other important factors that could affect our actual results, please refer to those contained in our 2022 annual report on Form 10-K, which is available on the Investor Relations section of our website at ir.verramobility.com and on the SEC's website at sec.gov.

前瞻性陳述不是對未來業績的承諾或保證，受各種風險和不確定性的影響，這些風險和不確定性可能導致實際結果與我們的預期存在重大差異。有關其他的討論——有關可能影響我們實際結果的重大風險和其他重要因素的討論，請參閱我們 2022 年 10-K 表格年度報告中包含的內容，該表格可在我們的投資者關係部分獲得網站 ir.verramobility.com 和 SEC 網站 sec.gov。

Finally, during today's call, we'll refer to certain non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is included in our earnings release, which can be found on our website at ir.verramobility.com and on the SEC's website at sec.gov.

最後，在今天的電話會議中，我們將提及某些非 GAAP 財務指標。這些非 GAAP 指標與最直接可比的 GAAP 指標的對賬包含在我們的收益發布中，可以在我們的網站 ir.verramobility.com 和美國證券交易委員會的網站 sec.gov 上找到。

With that, I'll turn the call over to David.

有了這個，我會把電話轉給大衛。

Thank you, Mark, and thanks to everyone for joining the call today. For today's call, I'll start with an overview of our excellent first quarter results and provide an update on key business drivers. I'll move on to a discussion of the industry trends that are driving our results and influencing our future views of the business. And I'll close with a recap of our strategic priorities across each of our business segments and share a summary tracking our progress.

謝謝馬克，感謝大家今天加入電話會議。對於今天的電話會議，我將首先概述我們出色的第一季度業績，並提供有關關鍵業務驅動因素的最新信息。我將繼續討論推動我們取得成果並影響我們對業務的未來看法的行業趨勢。最後，我將回顧我們每個業務部門的戰略重點，並分享一份跟踪我們進展的摘要。

We delivered exceptional first quarter results highlighted by strong revenue and adjusted EBITDA and solid free cash flow generation. We delivered $190 million (sic) [$192 million] of revenue in the first quarter, representing 13% growth over the prior year quarter. This was primarily driven by strong tolling trends in commercial services and increased recurring service revenue in Government Solutions.

我們交付了出色的第一季度業績，突出表現在強勁的收入和調整後的 EBITDA 以及穩定的自由現金流生成。我們在第一季度交付了 1.9 億美元（原文如此）[1.92 億美元] 的收入，比去年同期增長 13%。這主要是由於商業服務中強勁的收費趨勢和政府解決方案中經常性服務收入的增加。

Adjusted EBITDA of $88 million for the first quarter increased 17% over the prior year and was driven by volume-based operating leverage in both Commercial Services and Government Solutions. As a note, we had a catch-up entry in Government Solutions that benefited revenue and adjusted EBITDA by about $2 million. Craig will provide the details in his remarks.

第一季度調整後的 EBITDA 為 8800 萬美元，比上年增長 17%，這主要受商業服務和政府解決方案中基於數量的運營槓桿的推動。請注意，我們在政府解決方案中有一個追趕條目，這使收入受益並調整了 EBITDA 約 200 萬美元。克雷格將在他的發言中提供細節。

Starting with Commercial Services, I'll provide an overview of the first quarter performance for each of our segments. The CS team again delivered strong performance, revenue of approximately $86 million for the quarter represented a 17% increase over the same period last year. The primary factor driving this performance was increased volume.

從商業服務開始，我將概述我們每個部門的第一季度業績。 CS 團隊再次表現強勁，本季度收入約為 8600 萬美元，比去年同期增長 17%。推動這種表現的主要因素是增加的數量。

TSA throughput reached 100% of pre-pandemic 2019 volume, driving an increase in adopted rental agreements. We've also experienced strong adoption rates from renters for our all-inclusive tolling product offering.

TSA 吞吐量達到 2019 年大流行前吞吐量的 100%，推動了採用的租賃協議的增加。我們的全包式收費產品也受到租戶的強烈採用。

I am pleased to announce that we recently entered into a partnership with Telepass for rental car tolling in Italy. This partnership effectively allows Verra Mobility to offer our toll management solutions in Italy for our rental car partners and allows for interoperability across Italy, Spain, France and Portugal by utilizing Telepass' integrations with the tolling authorities in Italy and existing integrations in the other markets.

我很高興地宣布，我們最近與 Telepass 就意大利的租車收費達成了合作夥伴關係。這種夥伴關係有效地使 Verra Mobility 能夠在意大利為我們的租車合作夥伴提供我們的通行費管理解決方案，並通過利用 Telepass 與意大利收費當局的集成以及其他市場的現有集成，實現意大利、西班牙、法國和葡萄牙的互操作性。

While we do not anticipate current year revenue from the partnerships, this is another important milestone in building our European tolling business.

雖然我們預計今年不會從合作夥伴關係中獲得收入，但這是我們建立歐洲收費業務的另一個重要里程碑。

Moving to our Government Solutions business, we generated total revenue of $86 million, with $83 million being recurring service revenue. Service revenue increased 14% over the first quarter of last year, driven by the transition from product sales to recurring service revenue. Government Solutions margins were about 37% in the first quarter and up about 430 basis points over the prior year quarter, primarily due to increased annual recurring revenue that I mentioned.

轉向我們的政府解決方案業務，我們產生了 8600 萬美元的總收入，其中 8300 萬美元是經常性服務收入。在從產品銷售向經常性服務收入轉變的推動下，服務收入比去年第一季度增長了 14%。政府解決方案第一季度的利潤率約為 37%，比去年同期增長約 430 個基點，這主要是由於我提到的年度經常性收入增加。

T2 Systems delivered revenue of $20 million, representing growth of about 12% over the prior year quarter and adjusted EBITDA of $3 million, all of which were directly in line with our expectations.

T2 Systems 實現了 2000 萬美元的收入，比去年同期增長了約 12%，調整後的 EBITDA 為 300 萬美元，所有這些都直接符合我們的預期。

SaaS services and hardware sales were all in line with expectations with the latter benefiting from a push of several sales from the fourth quarter due to customer requested installation timing. With regard to first quarter sales activity in Q2, we had a strong booking for a large Tier 1 university in the Mid-Atlantic region to extend their T2 Solutions to include our parking access and control systems.

SaaS 服務和硬件銷售均符合預期，後者受益於客戶要求的安裝時間從第四季度開始的多項銷售。關於第二季度的第一季度銷售活動，我們對中大西洋地區的一所大型一級大學進行了強勁的預訂，以擴展他們的 T2 解決方案以包括我們的停車門禁和控制系統。

On the municipal side, Ashland, Kentucky was a great example of a multiple solution sale that included our permits and enforcement software, T2 Pay stations, mobile paying license plate recognition technology in citation and collection services.

在市政方面，肯塔基州阿什蘭是多解決方案銷售的一個很好的例子，其中包括我們的許可證和執法軟件、T2 支付站、用於引用和收集服務的移動支付車牌識別技術。

Turning to the macro perspective, I'm very pleased with the demand outlook across all of our segments. Despite market sentiment that a U.S. recession remains quite possible, we have not seen any evidence in travel demand is waning. The major U.S. airlines are all reporting strong bookings through the second quarter and the outlook from our rental car partners remain strong as well. In fact, while leisure travel appears to have returned to pre-COVID levels, there is still more opportunity for business travel.

轉向宏觀角度，我對我們所有細分市場的需求前景感到非常滿意。儘管市場認為美國仍有可能陷入衰退，但我們並未看到任何旅遊需求減弱的跡象。美國主要航空公司都報告了第二季度的強勁預訂，我們的租車合作夥伴的前景也依然強勁。事實上，雖然休閒旅行似乎已恢復到 COVID 之前的水平，但商務旅行仍有更多機會。

According to a recent survey by Deloitte, corporate travel spend in the U.S. and Europe is projected to be about 60% of 2019 levels in the first half of 2023 and rise to about 70% by the end of the year. The report projects full recovery of business travel by late 2024 or early 2025.

根據德勤最近的一項調查，美國和歐洲的商務旅行支出預計到 2023 年上半年將達到 2019 年水平的 60% 左右，到年底將上升到 70% 左右。該報告預計，到 2024 年底或 2025 年初，商務旅行將全面恢復。

A second macro trend is the continued push for safer roads and communities, which drives the need for investments in automated safety enforcement. The latest national highway traffic safety data from earlier this year estimated just a 0.2% decrease in U.S. traffic fatalities in 2022. So there's still much work to do to address this trend.

第二個宏觀趨勢是繼續推動更安全的道路和社區，這推動了對自動化安全執法投資的需求。今年早些時候的最新國家公路交通安全數據估計，到 2022 年美國交通事故死亡人數將僅減少 0.2%。因此，要應對這一趨勢，仍有許多工作要做。

In addition, U.S. traffic volumes are increasing according to the Federal Highway Administration, U.S. travel on all roads and streets increased by 2%, which equates to 4.5 billion additional vehicle miles for February 2023 as compared with the same month last year.

此外，根據美國聯邦公路管理局的數據，美國的交通量正在增加，美國所有道路和街道上的交通量增加了 2%，這相當於 2023 年 2 月與去年同月相比增加了 45 億英里的車輛行駛里程。

The need for road safety technology remains strong as evidenced by recent legislative activity in the states of Florida, Colorado and Washington, which I'll address later in my remarks.

佛羅里達州、科羅拉多州和華盛頓州最近的立法活動證明了對道路安全技術的需求依然強勁，我將在稍後的發言中談到這一點。

Lastly, we provided our top 3 strategic priorities for each business during our fourth quarter call on Slide 5 of our earnings overview presentation, you'll see a summary on each of these priorities. While several are ongoing and difficult to quantify on a quarterly basis, we're tracking well against each of our priorities, and I'll hit a few highlights here.

最後，我們在第四季度收益概覽演示幻燈片 5 的電話會議上為每項業務提供了前 3 大戰略優先事項，您將看到每個優先事項的摘要。雖然有幾個正在進行並且很難按季度量化，但我們正在很好地跟踪我們的每一個優先事項，我將在這裡重點介紹一些。

In Commercial Services, we are honestly working toward renewing our agreement with enterprise regarding adjacent expansion opportunities. We continue to execute well in the fleet management space with FMC revenue growing 13% over the same period last year. We ultimately see FMC growing to a comparable growth rate with the overall commercial services business.

在商業服務方面，我們誠實地致力於更新與企業就相鄰擴張機會達成的協議。我們在車隊管理領域繼續表現良好，FMC 收入比去年同期增長 13%。我們最終看到 FMC 的增長率與整體商業服務業務相當。

In Government Solutions, we're seeing positive momentum on photo enforcement legislation in several states, including Florida, Colorado and Washington, with the state of Washington recently signed into law. Florida is evaluating school zone speed in Colorado was looking at both expanding current programs and authorizing new photo enforcement use cases. All of these states represent attractive opportunities for future growth and will keep the market appraise as new details emerge.

在政府解決方案方面，我們看到幾個州（包括佛羅里達州、科羅拉多州和華盛頓州）在照片執法立法方面取得了積極進展，華盛頓州最近簽署成為法律。佛羅里達州正在評估學區速度，而科羅拉多州正在考慮擴大當前項目並授權新的照片執法用例。所有這些州都代表著未來增長的誘人機會，並將隨著新細節的出現而保持市場評估。

In addition, the investments we're making in our software platform and related projects are tracking toward our plan from both the timing and budget perspective. We expect to complete these initiatives in the second quarter of 2024, no change from our initial expectations.

此外，我們對軟件平台和相關項目的投資從時間和預算的角度來看都符合我們的計劃。我們預計將在 2024 年第二季度完成這些舉措，與我們最初的預期沒有變化。

And finally, in T2 Systems, all priorities remain on track. Our bookings in our core business are in line with our annual plan, and we expect continued growth in the municipal market in the second half of the year.

最後，在 T2 Systems 中，所有優先事項都在軌道上。我們核心業務的預訂符合我們的年度計劃，我們預計下半年市政市場將繼續增長。

In summary, our operating results and trends are all positive, business fundamentals are durable and our outlook has not changed and remains very positive.

總之，我們的經營業績和趨勢都是積極的，業務基本面是持久的，我們的前景沒有改變，仍然非常樂觀。

Craig, I'll turn it over to you to guide us through the financial results and the current year outlook.

克雷格，我會把它交給你來指導我們完成財務結果和今年的展望。

Thanks, David. Good afternoon, and thanks to everyone for joining us on the call. I'll start out today by providing an overview of our first quarter results followed by our 2023 financial guidance, and I'll conclude with a brief discussion on capital allocation.

謝謝，大衛。下午好，感謝大家加入我們的電話會議。今天，我將首先概述我們的第一季度業績，然後是我們的 2023 年財務指南，最後我將簡要討論一下資本配置。

Let's turn to Slide 7, which outlines revenue and adjusted EBITDA performance for the consolidated business. Total revenue increased approximately 13% year-over-year to about $192 million for the quarter, driven by strong operating performance across the company. Excluding domestic Government Solutions product sales in the first quarter of last year, we grew 15% year-over-year.

讓我們轉到幻燈片 7，它概述了合併業務的收入和調整後的 EBITDA 業績。在整個公司強勁的經營業績的推動下，本季度總收入同比增長約 13% 至約 1.92 億美元。不包括去年第一季度的國內政府解決方案產品銷售額，我們同比增長了 15%。

Recurring service revenue grew 15% over the prior year quarter, driven by strong travel demand and the expansion of the New York City school zone speed program. At a segment level, Commercial Services revenue grew 17% year-over-year. Government Solutions service revenue increased by about 14% over the prior year and T2 System Service revenue grew 10% over the first quarter of last year.

經常性服務收入較上年同期增長 15%，這得益於強勁的旅行需求和紐約市學區加速計劃的擴大。在細分市場層面，商業服務收入同比增長 17%。政府解決方案服務收入比上年增長約 14%，T2 系統服務收入比去年第一季度增長 10%。

Product revenue was $7 million for the quarter, about $4 million of this total was from T2 Systems, while $3 million was from international product sales within Government Solutions.

本季度的產品收入為 700 萬美元，其中約 400 萬美元來自 T2 Systems，而 300 萬美元來自 Government Solutions 的國際產品銷售。

From a total profit standpoint, consolidated adjusted EBITDA of $88 million increased by approximately 17% over last year. The core business, defined as excluding onetime domestic Government Solutions product sales generated adjusted EBITDA of approximately 18% versus first quarter of 2022.

從利潤總額的角度來看，8800 萬美元的綜合調整後 EBITDA 比去年增長了約 17%。與 2022 年第一季度相比，核心業務（定義為不包括曾經的國內政府解決方案產品銷售）產生的調整後 EBITDA 約為 18%。

As David mentioned in his remarks, we had a catch-up entry that benefited revenue and adjusted EBITDA in the first quarter. The underlying activity was operational in nature and hence was not adjusted out of our reported revenue or adjusted EBITDA. We recognized approximately $2 million in Government Solutions revenue for photo enforcement contract activity for a prior period resulting from a contract amendment in the first quarter of 2023. Since the expenses associated with this program had already been accrued, the approximate $2 million of revenue flowed through in its entirety to adjusted EBITDA and income before taxes.

正如大衛在他的評論中提到的那樣，我們在第一季度有一個有利於收入和調整後的 EBITDA 的追趕條目。基礎活動本質上是運營性的，因此沒有從我們報告的收入或調整後的 EBITDA 中調整。由於 2023 年第一季度的合同修訂，我們確認了前一時期照片執法合同活動的政府解決方案收入約為 200 萬美元。由於與該計劃相關的費用已經計提，因此約 200 萬美元的收入流向全部調整為調整後的 EBITDA 和稅前收入。

Moving on to Slide 8. We've generated about $351 million of adjusted EBITDA and approximately $763 million of revenue on a trailing 12-month basis, representing a 46% adjusted EBITDA margin. Over the same period, we've generated about $177 million of free cash flow for a 50% conversion rate of adjusted EBITDA, representing $1.13 of free cash flow per share.

轉到幻燈片 8。我們在過去 12 個月的基礎上產生了約 3.51 億美元的調整後 EBITDA 和約 7.63 億美元的收入，佔調整後 EBITDA 利潤率的 46%。同期，我們以 50% 的調整後 EBITDA 轉換率產生了約 1.77 億美元的自由現金流，相當於每股 1.13 美元的自由現金流。

Next, I'll turn to Commercial Services on Page 9, where we delivered revenue of about $86 million in the first quarter, increasing 17% year-over-year. Rental car tolling revenue increased 18% over the same period last year, driven by robust travel volume and increased product adoption. Additionally, our FMC business grew 13% versus Q1 of 2022 as our growth initiatives are beginning to take hold. First quarter adjusted EBITDA in Commercial Services was $54 million, representing 15% year-over-year growth. Adjusted EBITDA margins of about 63% reflected normal seasonality and were down slightly compared to the first quarter of last year due primarily to growth investments.

接下來，我將轉到第 9 頁的商業服務，我們在第一季度實現了約 8600 萬美元的收入，同比增長 17%。受強勁的出行量和產品採用率提高的推動，租車通行費收入比去年同期增長 18%。此外，隨著我們的增長計劃開始生效，我們的 FMC 業務比 2022 年第一季度增長了 13%。第一季度商業服務的調整後 EBITDA 為 5400 萬美元，同比增長 15%。調整後的 EBITDA 利潤率約為 63%，反映了正常的季節性，與去年第一季度相比略有下降，這主要是由於增長投資。

Let's turn to Slide 10, and we'll discuss the results of the Government Solutions business, driven primarily by New York City's photo enforcement expansion efforts, service revenue increased by $10 million or 14% over the same period last year to $83 million for the quarter. With New York City school zone now fully implemented, product revenue of nearly $3 million was driven by international programs.

讓我們轉到幻燈片 10，我們將討論政府解決方案業務的結果，主要受紐約市照片執法擴張努力的推動，服務收入比去年同期增加 1000 萬美元或 14%，達到 8300 萬美元四分之一。隨著紐約市學區現已全面實施，國際項目推動了近 300 萬美元的產品收入。

Adjusted EBITDA was $31 million for the quarter, representing margins of 37%, an increase of about 430 basis points compared to the prior year, driven by the catch-up entry I previously discussed, the transition from product sales to annual recurring revenue and a reduction in bad debt expense due to improvements in cash collections.

本季度調整後的 EBITDA 為 3100 萬美元，利潤率為 37%，比上年增長約 430 個基點，這主要是受到我之前討論的追趕進入、從產品銷售到年度經常性收入的轉變以及由於現金收款的改善，壞賬費用減少。

Let's turn to Slide 11, and we'll take a look at the results of T2 Systems, which is our Parking Solutions business segment. Revenue of $20 million in adjusted EBITDA of approximately $3 million were in line with expectations for the quarter, which included the pushout of product sales in the fourth quarter due to customer-requested installation timing. Software service and hardware sales were all consistent with expectations.

讓我們轉到幻燈片 11，我們將看看 T2 Systems 的結果，這是我們的停車解決方案業務部門。調整後的 EBITDA 收入為 2000 萬美元，約為 300 萬美元，符合本季度的預期，其中包括由於客戶要求的安裝時間而推遲了第四季度的產品銷售。軟件服務和硬件銷售均符合預期。

As we discussed last quarter, we made a number of process improvements around building and strengthening the quality of the pipeline and improving the forecasting process, and we're very pleased with the progress the business has made.

正如我們上個季度所討論的那樣，我們圍繞構建和加強管道質量以及改進預測流程進行了許多流程改進，我們對業務取得的進展感到非常滿意。

Okay. Let's turn to Slide 12 and take a look at reported income and leverage. We reported net income of approximately $5 million for the quarter, including a tax provision of $8 million, representing an effective tax rate of 63%. As a reminder, our tax rate is heavily impacted by permanent differences related to mark-to-market adjustments for our private placement ports.

好的。讓我們轉到幻燈片 12，看看報告的收入和槓桿率。我們報告本季度的淨收入約為 500 萬美元，其中包括 800 萬美元的稅收撥備，有效稅率為 63%。提醒一下，我們的稅率受到與私募港口按市值調整相關的永久性差異的嚴重影響。

Adjusted EPS, which excludes amortization, stock-based compensation and other non-recurring items, was $0.26 per share for the current quarter compared to $0.22 per share in the first quarter of 2022.

不包括攤銷、股票薪酬和其他非經常性項目的調整後每股收益本季度為每股 0.26 美元，而 2022 年第一季度為每股 0.22 美元。

On the right-hand side of the page, you can see that we ended the first quarter with a net debt balance of about $1.1 billion, resulting in net leverage of 3.2x for the first quarter. This is down from 3.8x net leverage in Q1 of 2022.

在頁面右側，您可以看到我們在第一季度結束時的淨債務餘額約為 11 億美元，導致第一季度的淨槓桿率為 3.2 倍。這低於 2022 年第一季度的 3.8 倍淨槓桿率。

During the first quarter, we paid down approximately $65 million of term loan debt, bringing the gross debt balance at quarter end down to about $1.2 billion, of which approximately $820 million is floating rate debt.

在第一季度，我們償還了約 6500 萬美元的定期貸款債務，使季度末的總債務餘額降至約 12 億美元，其中約 8.2 億美元為浮動利率債務。

In addition, we have also paid down an incremental $10 million of our floating debt during the second quarter of 2023. In total, on a year-to-date basis, we have paid down approximately $75 million of our floating rate term loan debt as of today's call.

此外，我們還在 2023 年第二季度還清了 1000 萬美元的浮動債務。總的來說，從年初至今，我們已經償還了大約 7500 萬美元的浮動利率定期貸款債務，因為今天的電話。

As we discussed in our fourth quarter earnings call, we entered into an interest rate swap agreement to hedge approximately $675 million notional of our floating rate debt with a float for fixed rate swap, representing about 82% of the floating rate debt.

正如我們在第四季度財報電話會議上討論的那樣，我們簽訂了一項利率互換協議，以浮動利率互換對沖約 6.75 億美元的浮動利率債務，約佔浮動利率債務的 82%。

As a reminder, the floating rate portion of our SOFR plus 325 basis point Term Loan B is fixed at a rate of 5.2% for 3 years with a monthly option to cancel beginning in December 2023 that we can execute in the event that interest rates move in our favor.

提醒一下，我們的 SOFR 的浮動利率部分加上 325 個基點的定期貸款 B 的利率固定為 5.2%，為期 3 年，並且從 2023 年 12 月開始每月可選擇取消，如果利率變動，我們可以執行對我們有利。

Moving on to cash. We generated approximately $45 million in cash flow from operating activities, resulting in $27 million of free cash flow for the quarter.

繼續現金。我們從經營活動中產生了大約 4500 萬美元的現金流，導致本季度的自由現金流為 2700 萬美元。

Finally, let's turn to Slide 13 and have a look at total year 2023 guidance, which will remain unchanged from our discussion last quarter with our slightly elevated 1Q performance being offset by moderate investment cost increases in the back half of the year.

最後，讓我們轉到幻燈片 13，看看 2023 年的總體指導，該指導與我們上個季度的討論保持不變，我們的第一季度業績略有提高，但被下半年投資成本的適度增長所抵消。

Based on our first quarter results and our outlook for the remainder, we're reaffirming all of the following guidance ranges. 6% to 8% revenue growth in constant currency, margin expansion of about 50 basis points, adjusted EPS of $1 to $1.10 per share and free cash flow of $135 million to $155 million.

根據我們第一季度的業績和我們對剩餘季度的展望，我們重申以下所有指導範圍。按固定匯率計算收入增長 6% 至 8%，利潤率增長約 50 個基點，調整後每股收益為 1 至 1.10 美元，自由現金流為 1.35 億美元至 1.55 億美元。

In terms of cadence for the rest of the year, we continue to anticipate revenue and adjusted EBITDA to increase sequentially in the second and third quarters. However, as we experienced in 2022, we expect a stronger second quarter with slower sequential growth in the third quarter due to travel demand shifting forward in the year. Consistent with historical trends, we would then expect a modest reduction to revenue and adjusted EBITDA in the fourth quarter.

就今年剩餘時間的節奏而言，我們繼續預計第二和第三季度收入和調整後的 EBITDA 將依次增加。然而，正如我們在 2022 年所經歷的那樣，由於今年旅行需求向前轉移，我們預計第二季度將更加強勁，而第三季度的環比增長將放緩。與歷史趨勢一致，我們預計第四季度收入和調整後的 EBITDA 將適度減少。

Relative to Commercial Services first quarter performance, TSA volume at 100% of 2019 levels and other KPIs in Commercial Services exceeded our expectations. In our guidance, we assumed TSA throughput levels to be in the 97% to 98% range of 2019 volume for the remainder of the year. We'll be monitoring TSA volume and forward travel bookings data from the airlines, while we currently continue to anticipate strong travel demand for the remainder of the year.

相對於商業服務第一季度的表現，TSA 數量達到 2019 年水平的 100%，商業服務的其他 KPI 超出了我們的預期。在我們的指導中，我們假設 TSA 吞吐量水平在今年剩餘時間內處於 2019 年吞吐量的 97% 至 98% 範圍內。我們將監控 TSA 數量和來自航空公司的遠期旅行預訂數據，同時我們目前繼續預計今年剩餘時間的旅行需求強勁。

Our guidance also contemplates increased operating and SG&A costs in Commercial Services for various growth initiatives as well as increased operating costs in Government Solutions for increased staffing to support the platform investments previously discussed.

我們的指南還考慮了為各種增長計劃增加商業服務的運營和 SG&A 成本，以及增加政府解決方案的運營成本以增加人員配置以支持前面討論的平台投資。

Finally, based on our free cash flow estimate, which implies a conversion rate of about 40% of adjusted EBITDA, we expect to reduce net leverage to approximately 3x by year-end 2023, which contemplates a balanced approach to debt paydown and share repurchases, all in line with what we discussed last quarter.

最後，根據我們的自由現金流估計，這意味著轉換率約為調整後 EBITDA 的 40%，我們預計到 2023 年底將淨槓桿率降低至約 3 倍，這考慮了債務償還和股票回購的平衡方法，一切都與我們上個季度討論的內容一致。

This concludes our prepared remarks. Thank you for your time and attention today. At this time, I'd like to invite Julie to open the line for any questions. Julie, over to you.

我們準備好的發言到此結束。感謝您今天的時間和關注。這個時候，我想請朱莉打開任何問題的線路。朱莉，交給你了。

(Operator Instructions) Your first question comes from Daniel Moore from CJS Securities.

（操作員說明）您的第一個問題來自 CJS 證券公司的 Daniel Moore。

Let me start with the guide. Obviously, it's a very strong quarter, above our expectations, and I believe consensus. And it sounds like TSA back to pre-pandemic levels. So just maybe talk about your thoughts on holding the guidance at this stage of the year versus potentially raising it and how much conservatism may be in there? I got a follow up.

讓我從指南開始。顯然，這是一個非常強勁的季度，超出了我們的預期，我相信共識。聽起來 TSA 回到了大流行前的水平。因此，也許可以談談您對在今年這個階段保持指導與可能提高指導的想法，以及其中可能有多少保守主義？我得到了跟進。

Sure. Yes. Thanks for the question, Dan. Thanks for being on the call. So as we think about this one from the revenue side, you're right. The TSA throughput came to 100% for the first quarter of 2019. And as I talked about in the prepared remarks, we're modeled in the high 90s for the balance of the year. I just -- we want to see this play out for another quarter. We don't have any reason to believe it's going to be any different right now, but I want to get another quarter under our belt. I think at this level to see if we would go ahead and raise. That's one piece.

當然。是的。謝謝你的問題，丹。感謝您的來電。所以當我們從收入方面考慮這個問題時，你是對的。 TSA 吞吐量在 2019 年第一季度達到 100%。正如我在準備好的發言中所說的那樣，我們在今年餘下時間模擬了 90 年代的高位。我只是 - 我們希望在另一個季度看到這種情況。我們沒有任何理由相信現在會有任何不同，但我想再花一個季度。我認為在這個水平上，看看我們是否會繼續加註。那是一件。

I think the second piece, Dan, on the revenue side is the GS business, that favorable $2 million catch-up that we had in the GS business was onetime non-recurring. That's another thing I'd throw out there.

我認為第二部分，Dan，在收入方面是 GS 業務，我們在 GS 業務中獲得的有利的 200 萬美元追趕曾經是非經常性的。那是我要扔掉的另一件事。

And then if I take those revenue comments and slow them down to EBITDA and EPS, I think the only other thing I'd add is that we're making those investments on the CS and GS side of the house. So in CS, those are product investments about running faster in our core markets, especially in the fleet business, which, as you heard, was up 13% in the first quarter. And then it's continued cost. We had some delayed hiring and some of the work that we're going to do in GS on the platform for the future.

然後，如果我將這些收入評論放慢到 EBITDA 和 EPS，我認為我唯一要補充的另一件事是我們正在房子的 CS 和 GS 方面進行這些投資。因此，在 CS 中，這些是關於在我們的核心市場中運行更快的產品投資，特別是在車隊業務中，正如你所聽到的，第一季度增長了 13%。然後是持續的成本。我們有一些延遲的招聘以及我們將在未來平台上的 GS 中做的一些工作。

So as I add all those things up, I still think I'm in the same spot for the year, but if travel continues strong, we'd certainly relook at it in another quarter or so.

所以當我把所有這些加起來時，我仍然認為我今年處於同一個位置，但如果旅行繼續強勁，我們肯定會在另一個季度左右重新考慮它。

Makes perfect sense. And then maybe one follow-up related. Despite that increased investment in SG&A continues to tick lower as a percentage of revenue. Obviously, aided a little bit by that the $2 million that you talked about. But is that Q1 level kind of sustainable? And what's kind of a realistic goal if we look out over the next 3 to 5 years embedded in your long-term plan?

很有道理。然後可能跟進相關。儘管增加了對 SG&A 的投資佔收入的百分比繼續下降。顯然，您所說的 200 萬美元對我們有所幫助。但 Q1 水平是否可持續？如果我們將未來 3 到 5 年納入您的長期計劃，那麼什麼樣的目標才算現實？

Yes, Dan. Sure. I think it was a little artificially depressed here in the first quarter. So the first thing, if we just take it down to EBITDA percent probably would be the easiest way to do it. So we did get a benefit obviously from that catch-up entry. I don't know if you caught it in the prepared remarks, but that was 100% flow-through because we'd already accrued the cost for that back in 2022.

是的，丹。當然。我認為第一季度這裡有點人為壓低。所以第一件事，如果我們把它降低到 EBITDA 百分比可能是最簡單的方法。因此，我們確實從那個追趕條目中明顯受益。我不知道你是否在準備好的評論中註意到了這一點，但這是 100% 的流轉，因為我們已經在 2022 年計入了這方面的成本。

So when you look at the margin, you're going to see a steep jump in GS and then for the overall business. So if I think about total margins for the company, I still think we're going to accrete about 0.5 point year-over-year, and I still think we're on that trajectory. If you look at just operating and SG&A costs as a percent of revenue, more specifically to your question, those costs, especially in the GS business, what we did see is the delay on some of the hiring on that just due to other priorities in the business and, of course, repeated headcount availability and some of the skills that we're trying to hire.

因此，當您查看利潤率時，您會看到 GS 的急劇增長，然後是整個業務的增長。因此，如果我考慮公司的總利潤率，我仍然認為我們將同比增長約 0.5 個百分點，而且我仍然認為我們正處於這一軌道上。如果你只看運營和 SG&A 成本佔收入的百分比，更具體地說是你的問題，那些成本，尤其是在 GS 業務中，我們確實看到一些招聘的延遲只是由於其他優先事項業務，當然還有重複的員工人數可用性以及我們試圖招聘的一些技能。

So I do expect that cost to go north in the second quarter and in the back half of the year and expect it to look a lot like the total year that we discussed with you last time now.

因此，我確實預計該成本將在第二季度和今年下半年上升，並預計它看起來很像我們上次與您討論的全年。

Your next question comes from Faiza Alwy from Deutsche Bank.

你的下一個問題來自德意志銀行的 Faiza Alwy。

I would love to have a little bit more color on the Telepass partnership that you mentioned in your prepared remarks. And I think I heard you say that there's no current revenue anticipated. But give us a sense sort of dimensionalize the partnership for us a little bit. Any further color on that would be helpful.

我希望對您在準備好的發言中提到的 Telepass 合作夥伴關係有更多的色彩。而且我想我聽到你說沒有預期的當前收入。但是給我們一種感覺，讓我們的伙伴關係更加立體化。任何進一步的顏色都會有所幫助。

Yes. I mean, just only just goes back to the original thesis of going to Europe, we think could we replicate the value proposition that we have for commercial fleets here in the U.S. related to access to toll roads. And for the most part, in Europe, you're doing that on a country-by-country basis. The partnership with Telepass, would actually, is sort of allowing us to accelerate our access to the group of countries that I listed in my prepared remarks. And so we'll anticipate that we can hopefully to kind of accelerate our value to those countries.

是的。我的意思是，只是回到最初的去歐洲的論點，我們認為我們可以復制我們在美國的商業車隊與收費公路相關的價值主張。在大多數情況下，在歐洲，你是在逐個國家的基礎上這樣做的。實際上，與 Telepass 的合作關係使我們能夠加快訪問我在準備好的發言中列出的國家組。因此，我們預計我們有望加速我們對這些國家的價值。

Some of that is going to be obviously, working with our customers in those countries. And then as we've spoken about the conversion to cash flows, we'll need to come alongside that to really get the full benefit of it. But Telepass is a major, major player in the toll. It's probably the major player in Europe related to tolling. So we're super excited to be on the radar and have a partnership like this.

其中一些顯然是與我們在這些國家/地區的客戶合作。然後當我們談到現金流量的轉換時，我們需要與之並駕齊驅才能真正獲得它的全部好處。但 Telepass 是收費的主要參與者。它可能是歐洲與收費相關的主要參與者。因此，我們非常高興能受到關注並建立這樣的合作夥伴關係。

Got it. And then just secondly, you were just talking about certain investments across both segments. I'm curious with respect to your approach. Are these -- would you characterize these as really discretionary expenses where maybe to the extent revenue comes in better than what you were forecasting, you may end up investing more? And if it's a bit lower, you can pull back on some of the spending. So give us a sense of how you're thinking -- thinking of investments with CR?

知道了。其次，您只是在談論這兩個領域的某些投資。我對你的方法很好奇。這些 - 您是否會將這些描述為真正可自由支配的支出，在某種程度上，收入可能比您預測的要好，您最終可能會投資更多？如果它低一點，你可以減少一些支出。那麼讓我們了解一下您的想法——考慮與 CR 進行投資？

Yes. Sure, Faiza. I think, I know where you're going with that one. The investments that we have in the business right now, we're going to make pretty much regardless of the environment unless, of course, we saw something extreme. So I don't know that I'm waiting on revenue to make these investments. I think, what we've seen in the GS space is just simply timing. I think we'll -- we have the same investment that we expected coming into the year with just the pacing of that investment is going to be weighted towards the back 3 quarters versus the first quarter.

是的。當然，法扎。我想，我知道你要去哪裡。我們現在對業務的投資，無論環境如何，我們都將進行投資，當然，除非我們看到極端情況。所以我不知道我是在等待收入來進行這些投資。我認為，我們在 GS 領域看到的只是時間安排。我認為我們將 - 我們擁有與我們預期進入今年的相同投資，只是該投資的步伐將在後 3 個季度而不是第一季度進行加權。

When I think about on the CS side, this is as after we've seen the efficacy of the early efforts that we've done, and this is primarily in the fleet business and rounding out some additional tools that will help us capture the small and mid-market players in the space as well as putting in the right commercial talent as we've seen the early efficacy of those, we're doubling down on those efforts for future growth.

當我考慮 CS 方面時，這就像在我們看到我們所做的早期努力的效果之後，這主要是在車隊業務中，並完善了一些額外的工具，這些工具將幫助我們抓住小和該領域的中端市場參與者，以及投入合適的商業人才，因為我們已經看到了這些人才的早期功效，我們正在加倍努力以實現未來的增長。

Your next question comes from James Faucette from Morgan Stanley.

你的下一個問題來自摩根士丹利的 James Faucette。

This is Jeff Goldstein on for James. I wanted to touch on the legislative opportunities. And maybe just touching on Washington specifically, where you said some -- it was recently signed into law there. So how should we think about the timing of you getting on the ground and potentially seeing a financial impact from that? And then maybe also talk us through the potential timing around recent events in Florida and Colorado as well.

這是詹姆斯的傑夫戈德斯坦。我想談談立法機會。也許只是特別談到華盛頓，你說了一些 - 它最近在那裡簽署成為法律。那麼我們應該如何考慮您開始工作的時間並可能從中看到財務影響？然後也許還可以與我們討論最近在佛羅里達州和科羅拉多州發生的事件的潛在時間安排。

Yes. I mean, Washington basically becomes another state that has all 3 use cases related for speed, red light as well as we've been working in Washington for some time. Now they have all 3. So that would actually be -- I would anticipate time to revenue there shorter, meaning we could probably -- depending on RFP timing and things like that, that would be this year type of thing in terms of pipeline.

是的。我的意思是，華盛頓基本上成為另一個擁有與速度、紅燈相關的所有 3 個用例的州，而且我們已經在華盛頓工作了一段時間。現在他們擁有所有 3 個。所以這實際上是——我預計那裡的收入時間會更短，這意味著我們可能——取決於 RFP 時間和類似的事情，這將是今年管道方面的事情。

Relative to places like Florida, while there's been really, really positive activity, it hasn't been signed yet, so we'll wait obviously until that's finalized. Those things typically take a few months relative to making sure that all the eyes are dotted so to speak, both legislatively as well in terms of policy in terms of how they roll it out. So I would anticipate discussions with customers this year, I would anticipate revenue for those next year.

相對於像佛羅里達這樣的地方，雖然確實有非常非常積極的活動，但還沒有簽署，所以我們顯然會等到最終確定。這些事情通常需要幾個月的時間才能確保所有的眼睛都被點綴，可以這麼說，無論是在立法方面還是在政策方面，以及他們如何推出它。所以我預計今年會與客戶進行討論，我預計明年會獲得收入。

Got it. Okay. And then can you talk about the shift to the all-inclusive fee structure within commercial? What are you doing there? How many customers on that type of fee structure or what type of lift do you see to revenue when you get customers on that platform? Maybe just talk us through that.

知道了。好的。然後你能談談商業中向全包費用結構的轉變嗎？你在那做什麼？這種費用結構有多少客戶，或者當您在該平台上吸引客戶時，您會看到什麼樣的收入提升？也許只是和我們談談。

Yes. I mean, first of all, this is our -- it's a program that we've developed on behalf of customers and for the market. It's just a really favorable customer experience because it allows you to predetermine your usage of tolls as well as to have that on your bill, when you turn in your vehicle. So from that standpoint, traditionally had always been a product that was mostly at the sort of off-airport type brands, but now many of our customers are bringing that online to their airport brands or the mainline brands. And so overall, it's a much better experience for customers are the renters and therefore, our customers are really pleased with it as well. So we would anticipate further penetration that as more toll roads open and more brands decide to adopt it.

是的。我的意思是，首先，這是我們的 - 這是我們代表客戶和市場開發的程序。這只是一種非常有利的客戶體驗，因為它允許您預先確定您的通行費使用情況，並在您上交車輛時將其記在賬單上。因此，從這個角度來看，傳統上一直是一種主要屬於機場外品牌的產品，但現在我們的許多客戶正在將其在線帶到他們的機場品牌或主線品牌中。總的來說，對於租房者來說，這是一種更好的體驗，因此，我們的客戶也非常滿意。因此，隨著更多收費公路的開通和更多品牌決定採用它，我們預計會進一步滲透。

Your next question comes from Keith Housum from Northcoast Research.

您的下一個問題來自 Northcoast Research 的 Keith Housum。

Just elaborate a little further on the prior question. David, I just want to remember the past discussions regarding our inclusive pricing that perhaps will have a negative impact on margins. Can you perhaps talk a little bit about the development of that product further? And do you still expect to see that upon adoption?

就前面的問題進一步闡述一下。大衛，我只想記住過去關於我們的包容性定價的討論，這可能會對利潤率產生負面影響。您能否進一步談談該產品的開發？你還希望在收養時看到這一點嗎？

I'm not sure where the negative impact on margin came from, Keith.

基思，我不確定對利潤率的負面影響來自哪裡。

Okay. Maybe...

好的。或許...

Yes. No, it's -- overall, it's a great product for customers as well as for us. The adoption is being increased because our customers are being seeing how it works well in different regions. And so they're rolling it out more. Again, it's really at their discretion, not ours.

是的。不，它 - 總的來說，它對客戶和我們來說都是一個很棒的產品。採用率正在增加，因為我們的客戶正在看到它在不同地區的運作情況。所以他們正在推出更多。同樣，這真的由他們自行決定，而不是我們的。

Got you. Okay. Appreciate that. Craig, a little bit more on the guidance. I can appreciate the wanting to be the more conservative. But can you give us a little bit of idea perhaps if you -- if the company at 100% of TSA travel versus 97%, 98%, what's the incremental difference in terms of revenue for CS?

明白了好的。感謝。克雷格，關於指導的更多信息。我可以理解想要變得更保守。但是你能不能給我們一些想法，如果你——如果公司 100% 的 TSA 旅行與 97%、98% 的公司相比，CS 收入的增量差異是什麼？

I think it's hard to equate those 2. I hate to go to 1% gets us this, Keith, as I think you well know, and it's not quite that prescriptive. But if I took it forward and I said, let's say, I see the tolling and violations performance in the first quarter that I saw in the balance of the year. Now in our original planned original guidance, we assumed a little lower than 97% to 98% for the first quarter.

我認為很難將這 2 個等同起來。基思，我討厭達到 1% 讓我們明白這一點，我想你很清楚，而且它並不是那麼規範。但是，如果我向前推進並說，比方說，我看到了我在今年餘下看到的第一季度的收費和違規行為。現在，在我們最初計劃的原始指導中，我們假設第一季度略低於 97% 至 98%。

So I don't think you'd quite be able to see what you saw for the first quarter, bring it through to the back half, but it would be $5 million approaching $10 million potentially if we were at that 100%. And I think what's important about that is that assumes that it's at the exact same mix that we saw and there's kind of nothing else going on in the portfolio, then moves the other way. So it's not enough to bring it up, I would say, a factor of tens of millions of dollars. But to the degree that we stay at exactly 100%, which, by the way, Keith, that is where we closed the quarter.

所以我不認為你能完全看到第一季度的情況，把它帶到後半部分，但如果我們達到 100%，那將是 500 萬美元接近 1000 萬美元。而且我認為重要的是假設它與我們看到的完全相同，並且投資組合中沒有其他任何事情發生，然後以另一種方式移動。所以僅僅提出它是不夠的，我會說，一個數千萬美元的因素。但就我們保持在 100% 的程度而言，順便說一句，基思，這就是我們結束本季度的地方。

So from (inaudible) to 331 that TSA throughput was exactly 100%, as I drag that forward to the end of April, it's still at exactly that 100%. So if we were to stay at exactly that level, we could potentially see some upside on the Commercial Services business.

因此，從（聽不清）到 331，TSA 吞吐量恰好是 100%，當我將其拖到 4 月底時，它仍然恰好是 100%。因此，如果我們要保持在那個水平，我們可能會看到商業服務業務的一些上行空間。

(Operator Instructions) Your next question comes from Louie DiPalma from William Blair.

（操作員說明）您的下一個問題來自威廉·布萊爾的 Louie DiPalma。

Was the impact from the New York City speed camera program shift from 16 hours to 24 hours, was that in line with the prior expectations that you set?

紐約市超速攝像頭計劃的影響是否從 16 小時變為 24 小時，是否符合您之前設定的預期？

It is. So if you go back and think about total New York City revenue, we said that, that would be down somewhere around $5 million to $10 million total year-on-year the way it looks today. That's still what I see today. So -- and the reason that it's down year-over-year, Louie, was because we have the difference of having product sales in 2022 is that shifted to ARR here in 2023, the timing of those things, which was offset partially by the 24/7, which went into place at the tail end of last year. So that's a slightly longer answer to your simple question. Yes, it is in and yes, it is as expected.

這是。因此，如果您回過頭來考慮紐約市的總收入，我們說過，與今天的情況相比，總收入將同比下降約 500 萬至 1000 萬美元。這仍然是我今天所看到的。所以 - 它同比下降的原因，Louie，是因為我們在 2022 年的產品銷售有所不同，是在 2023 年轉移到 ARR，這些事情的時間被部分抵消了24/7，於去年年底開始實施。所以這是對您的簡單問題的稍微長一點的回答。是的，是的，是的，正如預期的那樣。

Great. And in general, were speed camera net adds during the quarter strong, even though that New York City contract has completed?

偉大的。總的來說，即使紐約市的合同已經完成，本季度高速攝像機的淨增幅是否強勁？

You mean outside, are you just requesting outside of New York, you mean?

你的意思是在外面，你是說在紐約以外的地方請求嗎？

Yes. Yes.

是的。是的。

Yes. I mean I think everything was in line with plan.

是的。我的意思是我認為一切都符合計劃。

Great. And another one, switching to the commercial division. There's been a lot of initiatives for the different racks to onboard electric vehicles. Has that served as a benefit for your onboarding and title and registration businesses?

偉大的。另一個，轉到商業部門。對於車載電動汽車的不同機架，已經有很多舉措。這對您的入職、產權和註冊業務有好處嗎？

It does in as much as the fact that their electric doesn't matter as much as if they're inboard. They're sort of inflating new vehicles, which does impact our ability, both from a title and violations perspective and from a title and registration perspective. So yes, that's -- anytime they're adding vehicles, that's good for us.

它的作用在於它們的電力並不像它們在舷內一樣重要。它們有點像給新車充氣，這確實會影響我們的能力，無論是從產權和違規的角度，還是從產權和註冊的角度。所以是的，那是 - 任何時候他們增加車輛，這對我們都有好處。

There are no further questions at this time. This concludes today's conference call. You may now disconnect. Thank you.

目前沒有其他問題。今天的電話會議到此結束。您現在可以斷開連接。謝謝。