So that reality is reflected in how we are managing the company. We are confident in our continued transformation and that it will enable faster decision-making, greater operational leverage, and an even stronger customer experience. So after increasing our customer focus, the second major priority we identified in our leadership transition has been furthering our transformation efforts by realigning our cost structure and improving how we operate. Consistent with the leadership principle I discussed earlier, our organization acted with urgency. We completed the principal labor and certain non-labor cost takeout efforts in a rapid fashion that was made possible by the transformational work that we started months prior. This was also benefited by the interaction between management and the Transformation Advisory Committee. These decisions are always difficult. They affected capable colleagues who made meaningful contributions to VARM Mobility, and we did not take these decisions lightly. but the actions were necessary. They were necessary to help us align our organization and cost structure more closely with our current priorities, speed decision-making and accountability, and to ensure we have an organization that is poised for future growth and success. We've now moved into the next phase of the program with an increased focus on non-labor spending, third-party costs, procurement, organizational complexity, and opportunities to further improve the efficiency of our processes. and while we transform to reduce lower value and duplicative activity, we believe strongly in investing in technology, investing in product development and investing in customer service and implementation capabilities. To me, transformation cannot be a series of isolated cost actions. It must be disciplined, sustained efforts to improve how we allocate resources, how we prioritize and how we serve our customers and generate returns and new growth. And that's exactly what we're doing. Now I want to spend a moment on AI. In the last couple of months, our transformation has been pursuing two principal bodies of work related to AI. The first is using AI to improve how Vero Mobility operates. We are now evaluating, experimenting, and using AI that can help us accelerate software development, automate repetitive work, improve forecasting, identify operational abnormalities, and help employees analyze information more quickly. Our objective in deploying AI is not simply to deploy new technology for the sake of technology. It's to improve the speed, consistency, and quality of our work and allow our employees to spend more time on customers, complex decisions, and innovation. The second body of work is incorporating AI more deeply into the products and services that we provide. This is critical to how I see the future of Vera Mobility. Vera Mobility operates one of the largest connected transportation technology platforms in North America. Across our network, More than 28,000 intelligent edge sensors like cameras, radars, lidar, and monitoring sensors capture real-world transportation activity. We process over 230 million toll transactions and 56 million traffic events annually. We issue approximately 50 million parking permits and support these operations with more than 16,000 connected devices. So this combination of connected infrastructure and sensors, proprietary transportation data, and Mission Critical Software creates a unique foundation for AI. Unlike organizations that are just beginning to collect data, on a rolling basis, we have over 10 petabytes of transportation data and we have years of operational intelligence generated through real-world customer workflows at significant scale. Over time, we believe AI will allow us to transform this data into increasingly valuable insights. Improving image and sensor interpretation, predicting operational conditions before they occur, understanding changes in conditions, optimizing transportation and enforcement operations, automating complex decision-making, and delivering more intelligent software and edge hardware for our customers. We believe this positions Vera Mobility not only to improve the efficiency of our own operations, but also to create a new generation of AI-enabled transportation solutions that strengthen customer outcomes, improve roadway safety, increase the long-term value of our technology platform, and ultimately help save lives. Now, before I turn it over to Craig, I want to say a heartfelt thank you to our employee population. While I've been out on the road visiting and engaging with our customers, I've also been traveling to many of our sites across the U.S., meeting with all levels of employees. This has been a difficult past few months, and our employees have responded with resiliency and confidence. Their hard work and dedication energizes me, inspires me, and the rest of our executive team. And at Vera Mobility, we are one team. So with that, I'll turn the call over to Craig to discuss our second quarter financial results, our outlook, and the financial implications of the actions that we have underway. Craig?

Thank you, Jon. Good afternoon, everyone. As Jon outlined earlier, the second quarter reflected strong execution across the business. I'll spend the next few minutes walking through the financial results discussing performance across each of our businesses and then updating our outlook for the balance of the year. Let's turn to slide four which outlines the key financial measures for the consolidated business for the second quarter. Our Q2 performance was ahead of internal expectations with total revenue, adjusted EBITDA dollars, margin, and adjusted EPS landing stronger than expected. Our results were bolstered by New York City camera installation timing, Operational improvements across the enterprise and strong advancements in commercial services collection performance. Let me begin with our revenue performance. Government solution service revenue increased 17% in the quarter, driven by New York City camera installations and 8% growth outside of New York City. Within New York City, incremental net new camera installation growth exceeded the updated contract pricing change, generating 36% service revenue growth in the second quarter versus last year. As you may recall from our last discussion, inclement Q1 weather drove a delay in our expected installation volumes under our new expansion contract. Our team is fully caught up with the second quarter, and we are now back to where we originally expected to be by the close of the first half of 2026. Commercial services revenue returned to growth increasing 6% year over year, driven by strength in both rental car tolling and fleet management. Total parking solution service revenue increased about 1% primarily on SAS revenue performance. Total product revenue was $17 million for the quarter, government solutions contributed roughly $14 million, and T2 delivered about $3 million in product sales overall for the quarter. Consolidated adjusted EBITDA for the quarter was $111 million, stronger than our internal expectations and largely driven by the New York City camera installations I mentioned We reported a GAAP net loss of $48 million for the quarter, which reflects a non-cash, goodwill and intangible asset impairment charge of $104 million for the carrying value of T2 systems. The tax provision of about $6 million, after adjusting for the impairment and other non-recurring expenses, represents a normalized effective tax rate of about 28%. GAAP diluted EPS loss was 32 cents per share for the second quarter of 2026, and other non-recurring items was $0.38 per share for the second quarter this year compared to $0.34 per share in the second quarter of 2025. The adjusted EPS favorability versus prior year was driven by the increase in adjusted EBITDA and a reduction in shares outstanding, partially offset by increased depreciation expense. Another point Jon emphasized was the resiliency of our business model, and our cash generation during the quarter continued to reflect that strength. Cash flows provided by operating activities totaled $56 million, and we delivered about $33 million of free cash flow for the quarter, which was in line with our internal expectations. Next, I'll step through the performance of each of our businesses, beginning with commercial services on slide five. CS year-over-year revenue increased 6% in the second quarter. RAC tolling revenue increased 5% over the same period last year, driven by increased product adoption and tolling activity, despite a 1% decrease in US travel volume over the prior year quarter. Our FMC business increased 3%, or about $1 million year over year, more than offsetting the prior period churn we experienced in the second quarter of last year. Commercial services segment profit margins increased 100 basis points over the prior year, driven by operating leverage and continued success in lowering bad debt expense on improved cash collections. Turning to slide six, government solution service revenue increased 17% in the quarter driven by New York City camera installations and 8% growth outside of New York City. Total revenue grew 20% over the prior year quarter as product revenue increased about $4 million year over year. Government Solutions segment profit was $31 million for the quarter, representing margins of approximately 24%. The decline in segment profit margins is primarily attributable to the New York City pricing change. While this represents a reduction in segment profit margins over the prior year, this performance was better than expected due to the pacing of the New York City camera installations I discussed earlier. Additionally, we generated another strong quarter of contracted bookings at Government Solutions. reflecting continued demand for municipalities seeking technology solutions that improve roadway safety and traffic management. During the second quarter, we booked $25 million of new annual recurring revenue and contract awards. Notable bookings were concentrated in several work zone speed and school bus stop arm programs. Over the trailing 12 months, New incremental ARR bookings totaled approximately $74 million, reflecting sustained demand and stronger conversion across our pipeline. Let's turn to slide seven for a view of the results of parking solutions. We generated revenue of $20 million and segment profit of approximately $2 million for the quarter. SaaS and services sales increased about 1% compared to the prior year, while product revenue was effectively flat compared to 2025. Parking Solutions segment profit margins declined 465 basis points versus last year, driven primarily by product sales mix and the timing of operating expenses. Okay, let's turn to slide eight and discuss the balance sheet and take a closer look at leverage. We ended the quarter with a net debt balance of about $1 billion, which declined sequentially due to second quarter free cash flow. Net leverage landed at 2.4 times, which reflects the full in-quarter repayment of our credit revolver, which is 100% undrawn at present. Consistent with Jon's comments regarding disciplined capital allocation, we have $66 billion available under our $250 million share repurchase authorization. However, our priority today remains strengthening the balance sheet while maintaining financial flexibility through building cash reserves. Finally, let me turn to our outlook for the remainder of 2026. As Jon discussed earlier, our business continues to perform well operationally. However, the recently completed Avis budget and Hertz renewals include revised commercial terms that are materially less favorable to us than the prior agreement and affect our financial outlook. Accordingly, we have updated our full year guidance as follows. We expect total revenue in the range of 945 to 965 million. We expect adjusted EBITDA in the range of $360 to $370 million or an adjusted EBITDA margin of about 38%. Importantly, as discussed earlier, the changes to our outlook are largely attributable to the revised pricing associated with the Avis budget and Hertz renewal agreements. Our underlying operating performance across the business remains consistent with our expectations. We expect 2026 non-GAAP adjusted EPS to be in the range of $1.11 to $1.17 per share. And lastly, free cash flow is expected to be in the range of 105 to $115 million for 2026. The free cash flow guide anticipates higher CapEx spending versus prior guidance, driven by the accelerated timing of the Los Angeles Metro Contract Award and several accelerated school bus stop arm awards. The vast majority of the CapEx will be spent in government solutions to implement newly awarded photo enforcement programs. Additionally, we anticipate a $30 million use of working capital primarily related to both our recent RAC contract renewals and the timing of expenditures and collections of our ongoing installation work in New York City. Moving on to the segment level, for total year 2026, Government Solutions is expected to generate the high end of mid-single digit total revenue growth which reflects the blended growth rate across the segment including low double digit revenue growth for service revenue outside of New York City and high single digit growth for total revenue within New York City as new expansion installs and product sales more than offset the price normalization. Overall product revenue for GS is expected to be roughly flat. The outlook for GS margins is unchanged. We expect segment profit margins to contract by approximately 450 to 500 basis points compared to 2025, primarily due to the New York City renewal contract, including service pricing adjustments from the competitive procurement process and the inclusion of minority and women-owned subcontractor requirements by the City of New York. We expect third quarter margins to contract to comparable levels as Q1, that ramp up to the mid-20s by Q4 2026 fueled by volume leverage, MOSAIC cost savings, and school bus stop arm seasonality. We still expect GS margins to land in the low 20s overall for total year 2026, consistent with what we shared on our prior calls. Consistent with Jon's earlier comments regarding our long-term customer partnerships, we are very pleased to announce both the renewed Avis budget and Hertz agreements and look forward to expanding on our partnership with each of these long-standing and highly valued customers. While the new agreements provide greater contractual visibility over term, they were executed at lower pricing levels than our existing relationship and include an option for the customers to modulate their fleet volume. Additionally, we have reduced our A full-year TSA assumption such that full-year volume is expected to be around flat with 2025, representing a 1% to 1.5% reduction from our prior TSA assumption. As a result, commercial services revenue growth is expected to decelerate over the back half of the year in each of the third and fourth quarters, and we expect the overall growth will be in the negative high single-digit range for the year in total versus 2025. CS Segment Profit margins are expected to contract over the balance of the year as well, with a full year total expected to be in the low 60% range. We continue to anticipate that parking solutions revenue will be up low to mid single digits versus 2025 levels, driven by growth in SaaS, subscription, and professional services offerings. Lastly, we expect parking solutions margins to be slightly accreted to 2025. As Jon discussed earlier, we have taken action to realize the cost reduction initiatives that we committed to earlier this year. In total, this represents about $20 million of annualized costs that we expect to take out of the business. I would expect to generate full run rate savings beginning in 2027. Other key assumptions supporting our adjusted EPS and free cash flow outlook can be found on slide 10. Before I wrap up, I'd like to briefly touch on our segment As Jon discussed earlier, we're continuing to evolve how we manage the business. As part of that process, we're evaluating whether changes to our organizational structure and the way our leadership team reviews financial performance could affect our operating and reportable segments. For the second quarter, nothing has changed. We continue to report our results as we have historically. This evaluation is still underway, and if it ultimately results in a change to our segment reporting, including potentially reporting as a single operating and reportable segment. We would communicate that at the appropriate time and recast prior period information as required. Before I turn it back to Jon for his closing comments, I'll add that our second quarter results demonstrate the operational momentum Jon described earlier. While we have updated our outlook to reflect the economics of two important customer renewal The underlying execution across the business remains strong. Our balance sheet continues to strengthen and we remain focused on disciplined execution during the second half of the year. Jon, back over to you.

Thanks, Craig. Let me close by returning to the commitments we made when I assumed the CEO role. First, we said we would broaden and deepen our customer relationships. And what did we do? Well, I'd highlight that we have reached a new seven-year agreement with ABG and renewed Hertz under a new five-year agreement. We were also awarded the new contract in the city of Los Angeles, which, once operational, will represent one of the largest speed enforcement programs that we have at Vero Mobility. Second, we said we would accelerate our transformation with urgent focus on organizational changes to make us faster and more efficient. And we have realigned the customer organization. We've combined and catalyzed the product and engineering organizations. We completed significant cost actions and established clear operating accountability. We're igniting the use of AI to help us improve our operations in the products and services we offer to our customers in the future. And while these are important early steps, we believe the results of these swift actions will help create stability, predictability, and shareholder value. I intend to continue to lead Vera Mobility with deliberate intent to make this company more focused, more efficient, and more of a transportation technology leader. And when we do that, I believe we will create value for our shareholders. So thank you again for your time and attention today. And at this time, I'd like to invite Cherie to open the line for any questions.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. One moment while we compile the Q&A roster. Our first question will come from the line of Tomo Sano with JP Morgan. Your line is open.

Hello, everyone, and congratulations, Jon, on a new role.

Thank you very much. I appreciate that.

On the AVIS contracts, could you please walk us through the circumstances that led to the initial termination notice, and then what were the primary factors that ultimately drove the AVIS to rescind the notice and enter into an extension, please? Thank you.

Yeah, so Tomo, what I would say is, you know, as we disclosed, we received a termination notice from the customer. That was deeply disappointing, of course. And then, you know, after a series of leadership changes, you know, I took it upon myself and the management team to get together, and we re-approached ABIS, and we listened. We have, you know, one mouth in two ears, and so we approached that long-held customer with that in mind. We better understood what they were trying to do, and I'm very pleased to say that we, after a series of meetings and negotiations, built, I think, what is a very, very strong basis for what I call a constructive long-term relationship going forward that takes into account their strategic priorities and also the values, the work that Vero Mobility does, the value of our technology platform. and the way we operate to help them de-risk the operations that they do and deliver better services to their customers. So I think that speaks again to the value of broadening and deepening our customer relationships. It's a very, very large focus for me and for the organization.

Thank you, Jon. And then follow up, following the AVS and Hartz renewals, could you Summarize the key economic changes versus the prior agreements, pricing, any variable components and volume assumptions. And if you give us any updates with the enterprise as well. Thank you.

Hey Tomo, it's Craig. I'll let Jon come in at the end and give you some perspective on enterprise. But let me start with... Everything we said was really in our prepared remarks, but I'll go ahead and summarize that. So Hertz is a five-year extension. That was obviously done early. That wasn't done and that wasn't up for renegotiation until the summer of 2027. As Jon mentioned, ABG is a seven-year deal. Look, I want to say it again, financially, we're thrilled to partner with both of these customers. We couldn't be happier. If I think about kind of what we said in the script and what we said in our earnings release, you know, we talked about that they are in less favorable terms. We talked about that there may be some ability to modulate some of the volumes. That's something I think if you listen to the public statements from some of our customers, they mentioned that on their call. But here's what I would say is, you know, we've had these customers for 20 years, as Jon mentioned. We're in daily contact with our customers. Fleet volumes have always been important. to us, and obviously that's how they run their business. So, you know, I think we'll have a pretty good idea of what's going on for at least the near term. And I think the other thing is as we gain experience under the new contracts, we'll be able to better be positioned to give some, you know, maybe a little further down the road look to them that I can't today. And then I would say, you know, I think in total I could imagine that this question would come up quite a bit today is for competitive reasons. You know, we can't disclose anything that's going on between our customers. But again, from our view, I think these contracts really strike the right balance of competitive pricing and pricing at a differentiated value of what we do at Vera, scale, reliability, and innovation. The contracts are unique. They're tailored to each customer. I don't know that that's necessarily new. They've always kind of been that way. And then I would say the final thing, longstanding, very, very deeply integrated partnerships, which I think were really strengthened as we had a leadership change here at Vera Mobility, and I think you can see the results. So, Jon, you want to say something about Enterprise?

Yeah, sure. Very impressed by the Enterprise Mobility team and what they're doing. I'd also just mention that we're engaged in positive discussions with them. And I think that for all of our large rental car customers, something that I think is rather defining is we're engaging with these large customers at the most senior levels in their businesses. They're also recognizing that They can use us as an accelerator in their business, particularly with respect to technology. We are a technology leader here, and I feel really, really comfortable with where we're taking these relationships We're providing new technology avenues for them to continue to have more success in their businesses as they're also trying to transform. They have very complex businesses to run. And my goal and our company's goal is to make sure that we're helping make their lives easier and helping improve their end customer experiences. And that when we do that, we're going to have a great degree of mutual success. So really, really proud of the way we're refocusing the organization here. to deliver a more customer-focused and customer-centric experience for our customers.

Thank you, Craig and Jon. Appreciate it.

Thank you, Tom. Thank you. One moment for our next question. That will come from the line of Daniel Moore with CJS Securities. Your line is open.

Thank you. Good afternoon, Jon. Good afternoon, Craig. Appreciate all the color this afternoon. I know you're limited, but maybe ask one or two more questions about the new contracts and then move on. Are there new floors or minimums in terms of fleet volumes or percentages of customer volumes dedicated to VERA that would provide you some base level of revenue visibility from a budgeting and planning perspective?

I'll start with that one. I can't disclose that, Dan, and I just can't because we have different contracts with different customers, and we have one customer that we're talking to right now, and I just don't want to speak on behalf of my customers. But here's what I would say on that is we did talk about the fact that there's some ability to modulate fleet volume, and I'd go back to saying that this is something – The addition and contraction of fleets at RACs is how they run their business. Obviously, this may run a bit deeper than that, but we're in daily contact with our customers. We know, we work with them on a daily basis, and I think we know how to forecast this. As I think about if I want to take this out a little further, You know, in a couple quarters time, with a bit of a course of dealing, I should be able to do that. But right now, as we're in the middle of this, major news out of the company for both of these renewals in just the last couple weeks, with the third one that we're talking to, I just can't get into it in an open forum, Dan. But I appreciate the question.

No, I understand. And the changes have gone into effect immediately, correct? That is correct. Okay, just making sure I get the revised guide. Okay. Maybe just in terms of the city of Los Angeles, can you talk maybe a little bit more about the scope of the revenue opportunity? How would you think about it ramping? Are you selling them or leasing cameras as you traditionally would? And any thoughts about kind of margins relative to where government solutions is currently running?

Yeah, you bet. Well, I'm really, really excited about what's going on in California. I think if you back up for a second, The macros, the setup for the success that I expect and I believe that we'll continue to have in that government business is something that started multiple years ago when I came to this business and identified that there was a massive opportunity there if we helped unlock TAM, unlock new opportunities within the legislatures. Because many people don't realize this, but Photo enforcement programs and automated safety programs are typically authorized or not authorized as a matter of state statute. So there has to be legislative authorizing activity in order to have these life-saving technologies available for the cities and local governments to be able to roll them out. So we worked very hard as a government relations function starting many years ago to help expand a massive amount of TAM. And frankly, that continues to expand. Most recently in California, what I'm really excited about is the AB645, which was the legislative authorization that allowed for speed enforcement in California, was done so in a in what I think was a prudent manner. The state of California said this is new for us and we're going to roll out a pilot in six major cities. And what we've seen so far is six out of six of the cities have selected Bear Mobility as the technology partner, as the only credible leader that they believe has the ability to deliver the results that they would know and they would expect. And so when I think about, Dan, when I think about there's only one New York City, there's only one Los Angeles. and I'm really excited to be able to serve that customer. I think we're expecting $10 million in ARR from that agreement once it's finalized. We received the nod there from the city and we're working through contract negotiations, etc. We're really, really honored to be able to move some of these efforts out west because we know the efficacy of these programs. It's deeply meaningful to us as a company that we can continue to expand commercially but also further our critical mission of saving lives. That's very, very important to us.

Really helpful. I'm thinking one more just because obviously there's been a lot of change, but maybe it's too early, but given the write-down and parking solutions, maybe just, you know, what's your sense of the future of that business from your perspective? Is it a vehicle for growth or, you know, could it maybe be a divestment candidate at some point? And again, really appreciate the old color to this afternoon. Yeah, thanks, Dan.

I mean, here's what I'd say on parking. You know, first, I would acknowledge that, you know, over the past couple years, the business hasn't performed how, you know, I would like to have seen it perform. All that being said, it is growing. And I would say that it's also generating cash. And so, you know, that's part of our portfolio right now. And frankly, I think there's a lot of opportunity to improve that business. And it's certainly one of the areas that I will be focusing on. Thank you again.

Thank you. As a reminder, to ask a question, please press star 1-1. Our next question will come from the line of Faiza Ali with Deutsche Bank. Your line is open.

Yes, hi, thank you. Jon, I wanted to get your perspective on, you know, what do you think changed over the last few years from either a technology competitive or kind of end market perspective? that led to, you know, these contracts being signed at, you know, much more unfavorable terms than before. So, yeah, we'd just love to hear kind of your thoughts on what really happened.

Yeah, I think I've shared, you know, that this was a surprise to us, but here's what I can tell you since I've taken over the role. I now have engaged and our business is engaged with the very, very best and brightest, highest level of these organizations that we serve. And I think we now much better understand their priorities, how they're making decisions, how they're trying to change and affect their business, and we're gonna be their partner for that. Now, I also think that it's really important to know from a Vero Mobility shareholder perspective that we have additional technology that we think is going to help lay the basis for continued future success and truthfully, the fact that we were able to renew these agreements and the fact that we were able to build back the relationship with Avis I think is a testament to the soundness of our technology platform and our ability to execute and de-risk what can be very, very problematic in these large fleets which are trying to have renters move through all kinds of different jurisdictions. They receive parking tickets. They receive speeding tickets. Of course, they can go through multiple different toll authorities. And when those types of things go wrong, it can be extremely disruptive for those fleets. And I'm really, really proud that the most senior levels for these large companies, they look at us and they know with certainty that we're going to deliver and that that are say will match our due when we serve them and continue to bring them to new technology. So I'm really excited for our future.

All right. And then I guess as I think about EBITDA margins for the commercial segment, do you think that those margins are going to stay at the lower level that is implied by the back half Guide, or do you think that there are some, you know, cost initiatives? Like, can you right size the cost base, you know, just given these new contracts and kind of what are some of the areas of opportunity?

Yeah, Faiza, this is Craig. I'll take that one. You know, I'm not going to go beyond 26 right now. And we talked about, you know, that our margin percent is going to be lower than we thought at the beginning of the year. But as I think about it, When we were on the phone maybe two months ago, we talked in theory about we're going to re-look at our cost base. In a very short amount of time, we were able to get that to a pretty solid number. We think that's going to be $20 million, potentially or more, as we look at a run rate for 2027. And we're not done yet. What I would say is done. is when we look at the headcount of the company. I think we're pretty much done there, but we still have a large opportunity to think about in some of the things that Jon listed in his prepared remarks about how we source, how we serve customers at the roadside. So there's still more cost to go. So I can't go out beyond 2026, but what I would say is clearly there's an impact here, if you could see that from the guide and the math. but we're not standing still on being able to further optimize the company and I think in a very short time we've put a pretty big number up that we're continually chipping away at on a daily basis.

Great. Thank you so much.

Thank you. I'm showing no further questions at this time. This concludes today's program. Thank you all for participating. You may now disconnect.