Key Takeaways:
Verra Mobility shares plunged 27% in after-hours trading after Avis Budget Group terminated their contract, effective September 2026, cutting the company's annualized revenue by as much as $145 million.
"We were surprised and disappointed to receive this notice from Avis Budget Group given our longstanding partnership and the significant time invested by both parties in ongoing extension negotiations," David Roberts, president and chief executive officer of Verra Mobility, said.
The smart mobility technology provider now expects full-year revenue of $985 million to $995 million, down from the $1.03 billion analysts had projected, according to FactSet. Adjusted earnings per share are forecast at $1.19 to $1.25, below the $1.36 consensus estimate. The company also lowered its adjusted EBITDA outlook to $380 million to $385 million and free cash flow to $140 million to $150 million.
The contract termination is expected to reduce Commercial Services' 2026 annualized revenue by $135 million to $145 million and segment profit by $120 million to $125 million, before accounting for planned cost reductions. Verra Mobility said it is moving to cut costs and reallocate resources tied to the Avis account to other customers. The company is also reviewing matters related to the parties' negotiations and the handling of confidential information, signaling it may pursue legal action to protect its contractual rights and intellectual property.
Shares traded at $9.49 after hours, bringing the year-to-date decline to 42%. The stock has lost nearly half its value since the start of 2026, and the Avis contract loss removes a major revenue contributor from the company's Commercial Services segment. Investors will watch for further details on cost-cutting measures and any potential legal developments in the months ahead.
This article is for informational purposes only and does not constitute investment advice.
