Revenue Growth

FY 2025

Approximately 8% for FY 2024 "

Approximately 6% for FY 2025 "

lowered

Adjusted EBITDA Growth

FY 2025

Approximately 9% for FY 2024 "

Approximately 3% for FY 2025 "

lowered

Adjusted EPS

FY 2025

Upper end of $1.15–$1.20 per share for FY 2024 "

$1.30–$1.35 per share for FY 2025 "

raised

Adjusted Free Cash Flow

FY 2025

Upper end of $155M–$165M for FY 2024 "

$175M–$185M for FY 2025 "

raised

CapEx Spending

FY 2025

About $75 million in 2024 "

Approximately $90 million in FY 2025 "

raised

Net Leverage

FY 2025

Approximately 2× for FY 2024 "

Approximately 2× by year-end 2025 "

no change

Government Solutions Revenue Pipeline and Contract Awards

In Q1–Q3, discussions consistently highlighted strong service revenue growth, incremental ARR wins, and expanded opportunities through legislation and customer expansions. " " "

In Q4, the company detailed robust contract awards (e.g., $11M incremental ARR in Q4 and $56M full-year incremental ARR) and new legislative-driven market opportunities. " " "

Consistent emphasis on a growing, stable Government Solutions pipeline with continued incremental ARR, indicating strengthened future growth potential.

Delayed Revenue Realization in Government Programs

Q1 and Q3 presentations stressed that converting government backlog to full revenue takes 12–18 months, framing it as standard industry timing. " " "

Q4 reiterated the same 12- to 18‑month revenue conversion timeline for new contract awards. "

Stable and predictable delay in revenue realization with no significant change in sentiment across periods.

Travel Demand Resilience and Volatility

Q1–Q3 earnings calls noted robust TSA throughput (around 106% of 2023) with some volatility from hurricanes in Q3, reflecting healthy travel demand overall. " " "

Q4 reported TSA throughput in the low 100% range and highlighted external disruptions like winter storms and wildfires, together with a continued positive travel outlook. " " "

Consistent travel demand strength with emerging focus on short‐term external disruptions affecting daily performance, though long‐term resilience remains intact.

Margin Pressure from Increased Investments

Q1 mentioned ongoing SG&A and ERP consolidation investments with modest impact; Q2 and Q3 detailed incremental costs (including about $5M ERP costs) and rising pressure from cost‐intensive installations. " " "

Q4 emphasized margin pressure from a new ERP implementation, cost-intensive installations, and SG&A expenses that are projected to cost 150–200 basis points of margin in 2025. "

Recurring caution regarding elevated costs from investments; while strategic, they are increasingly pressuring margins in the near-term.

Capital Allocation and Free Cash Flow Management

Q1 to Q3 provided details on free cash flow (from $42M in Q1 to a record $85M in Q3) along with disciplined share repurchases, debt refinancing, and an emphasis on maintaining low net leverage. " " "

Q4 underscored opportunistic share repurchases (nearly $150M in Q4 on a $200M annual pace), strong full‑year free cash flow of $153M, and a continued focus on debt reduction and capital discipline. " " " "

Consistently strong capital management with improving free cash flow generation and ongoing strategic share repurchases that bolster a positive future outlook.

T2 Systems SaaS Transition and Associated Revenue/Profitability Uncertainties

Across Q1–Q3, the transition from hardware to SaaS was discussed with noted revenue declines in product sales offset by growing recurring SaaS revenue and incremental operational improvements—supported by new leadership in Q3. " " "

Q4 described continued revenue and profitability challenges, including a 35% product revenue decline and a significant noncash goodwill impairment; however, long‑term SaaS growth potential remains a key part of the strategy. " "

Persistent uncertainties remain during the SaaS transition. While long‑term potential is acknowledged, there is a more immediate focus on operational and profitability challenges in the current period.

International and Domestic Market Expansion

Q1–Q3 discussions consistently covered both international (e.g., Canada, Europe, Australia) and domestic expansion through product sales, cashless toll adoption, and enforcement program wins, with legislative support and evolving service models. " " "

Q4 focused on domestic market expansion driven by legislative changes (30 bills enacted, expanding addressable market) along with robust cashless toll adoption (14 new toll roadways), reinforcing overall growth. " " "

A strategic, steady push for expansion globally remains—with a sharper legislative and domestic focus emerging in Q4 that underpins long‑term market growth.

Contract Wins and Renewals

In Q1–Q3, multiple wins—including contracts in Florida, Washington, international markets, and key renewals—were emphasized as steadily increasing ARR and reinforcing predictable recurring revenue. " " "

Q4 reported continued strength with new wins (e.g., $11M incremental ARR in Q4) and highlighted renewal metrics (97% contract renewal rate) along with supportive legislative trends. "

Consistent strong performance in winning new and renewing existing contracts, which supports a solid foundation for sustained recurring revenue growth.

Emerging Elevated Bad Debt Expense Risk

Q1 and Q2 discussed elevated bad debt expense (up to $5M in Q1 and $3.9M in Q2) attributed to contractual issues rather than consumer weakness, implying a temporary volume‐driven spike. " "

There is no mention of bad debt expense risk in Q4.

No current mention in Q4 suggests that the earlier bad debt concerns have either been resolved or are no longer a significant issue, indicating an improved risk profile.

Ongoing Platform and Operating System Migration Costs

Q1 and Q3 covered the necessity of platform consolidation and modernization efforts—with Q1 noting broad consolidation plans and Q3 outlining a $5M noncapitalized ERP cost in early 2025. " " "

Q4 similarly anticipates approximately $5M in noncapitalized costs for ERP/OS migration in the first half of 2025. "

A stable, ongoing investment in IT infrastructure that is expected to be a one‑time cost, with consistent treatment and outlook across periods.