Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

Use of Estimates

Use of Estimates

The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. There have been no material changes in the Company's significant accounting policies from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023.

Management believes that its estimates and assumptions are reasonable in the circumstances; however, actual results could differ materially from those estimates.

Concentration of Credit Risk

Concentration of Credit Risk

Significant customers are those which represent more than 10% of the Company’s total revenue or accounts receivable, net. Revenue from the single Government Solutions customer exceeding 10% of total revenue is presented below:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
City of New York Department of Transportation		15.5	%		16.5	%		15.9	%		17.1	%

The City of New York Department of Transportation (“NYCDOT”) represented 13% and 18% of total accounts receivable, net as of September 30, 2024 and December 31, 2023, respectively. There is no material reserve related to NYCDOT open receivables as amounts are deemed collectible based on current conditions and expectations. No other Government Solutions customer exceeded 10% of total accounts receivable, net as of any period presented.

Significant customer revenues generated through the Company’s Commercial Services partners as a percent of total revenue are presented below:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Hertz Corporation		10.5	%		11.8	%		10.9	%		11.8	%
Avis Budget Group, Inc.		14.2	%		15.1	%		13.7	%		13.8	%
Enterprise Mobility		12.2	%		11.6	%		11.6	%		10.5	%

No Commercial Services customer exceeded 10% of total accounts receivable, net as of any of the periods presented.

There were no significant customer concentrations that exceeded 10% of total revenue or accounts receivable, net for the Parking Solutions segment as of or for any of the periods presented.

Allowance for Credit Losses

Allowance for Credit Losses

The Company reviews historical credit losses and customer payment trends on receivables and develops loss rate estimates as of the balance sheet date, which includes adjustments for current and future expectations using probability-weighted assumptions about potential outcomes. Receivables are written off against the allowance for credit losses when it is probable that amounts will not be collected based on the terms of the customer contracts, and subsequent recoveries reverse the previous write-off and apply to the receivable in the period recovered. No interest or late fees are charged on delinquent accounts. The Company evaluates the adequacy of its allowance for expected credit losses by comparing its actual write-offs to its previously recorded estimates and adjusts appropriately.

The Company identified pools of receivables based on the type of business, industry in which the customer operates and historical credit loss patterns. The following presents the activity in the allowance for credit losses by reportable segment for the nine months ended September 30, 2024 and 2023, respectively:

	Commercial			Government			Parking
($ in thousands)	Services(1)			Solutions			Solutions			Total
Balance at January 1, 2024	$	15,661		$	2,426		$	426		$	18,513
Credit loss expense (income)		11,599			(226	)		52			11,425
Write-offs, net of recoveries		(10,240	)		(107	)		(16	)		(10,363	)
Balance at September 30, 2024	$	17,020		$	2,093		$	462		$	19,575
	Commercial			Government			Parking
($ in thousands)	Services(1)			Solutions			Solutions			Total
Balance at January 1, 2023	$	11,177		$	4,573		$	157		$	15,907
Credit loss expense (income)		9,378			(1,964	)		139			7,553
Write-offs, net of recoveries		(5,135	)		(185	)		(562	)		(5,882	)
Balance at September 30, 2023	$	15,420		$	2,424		$	(266	)	$	17,578

(1)This primarily consists of receivables from drivers of rental cars for which the Company bills on behalf of its customers. Receivables not collected from drivers within a defined number of days are transferred to customers subject to applicable bad debt sharing agreements. The allowance for credit losses for driver-billed receivables was 82% and 86% of the total Commercial Services allowance for credit losses as of September 30, 2024 and 2023, respectively.

Remaining Performance Obligations

Remaining Performance Obligations

Deferred revenue represents amounts that have been invoiced in advance and are expected to be recognized as revenue in future periods, and it primarily relates to Government Solutions and Parking Solutions customers. The Company had approximately $11.2 million and $13.1 million of deferred revenue in the Government Solutions segment as of September 30, 2024 and December 31, 2023, respectively. The Company recognized $1.1 million and $1.7 million of revenue excluding exchange rate impact during the three months ended September 30, 2024 and 2023, respectively, and $7.0 million and $5.8 million, of revenue excluding exchange rate impact during the nine months ended September 30, 2024 and 2023, respectively, related to amounts that were included in deferred revenue as of December 31, 2023 and 2022. The Company had approximately $24.5 million and $19.7 million of deferred revenue in the Parking Solutions segment as of September 30, 2024 and December 31, 2023, respectively. The Company recognized $2.6 million and $3.9 million of revenue during the three months ended September 30, 2024 and 2023, respectively, and $18.0 million and $18.7 million of revenue during the nine months ended September 30, 2024 and 2023, respectively, related to amounts that were included in deferred revenue as of December 31, 2023 and 2022.

Transaction price allocated to the remaining performance obligations includes deferred revenue above and unbilled amounts that are expected to be recognized as revenue in future periods. As of September 30, 2024, total transaction price allocated to performance obligations in the Government Solutions segment that were unsatisfied or partially unsatisfied was $254.8 million, of which $127.8 million is expected to be recognized as revenue in the next twelve months and the rest over the remaining performance obligation period. The Company elected the practical expedients to omit disclosure for the amount of the transaction price allocated to remaining performance obligations with original expected contract length of one year or less and the amount that relates to variable consideration allocated to a wholly unsatisfied performance obligation to transfer a distinct good or service within a series of distinct goods or services that form a single performance obligation.

Interest Rate Swap

Interest Rate Swap

In December 2022, the Company entered into a cancellable interest rate swap agreement to hedge its exposure to interest rate fluctuations associated with the LIBOR (now transitioned to Term Secured Overnight Financing Rate, “SOFR”) portion of the variable interest rate on its 2021 Term Loan. Under the interest rate swap agreement, the Company paid a fixed rate of 5.17% and the counterparty paid a variable interest rate. The Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement with the counterparty which provided for the net settlement of all, or a specified group, of derivative transactions through a single payment. The notional amount on the interest rate swap was $675.0 million. The Company had the option to effectively terminate the interest rate swap agreement starting in December 2023, and monthly thereafter until December 2025. The Company treated the interest rate swap as an economic hedge for accounting purposes and any changes in the fair value of the derivative instrument (including accrued interest) and related cash receipts or payments

were recorded in the condensed consolidated statements of operations within the loss (gain) on interest rate swap line item. The Company exercised its option to cancel the interest rate swap agreement as of September 30, 2024.

The following details the components of the loss (gain) on interest rate swap for the respective periods:

	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2024			2023			2024			2023
Change in fair value	$	1,169		$	202		$	1,316		$	(3,361	)
Cash (receipts) payments		(256	)		(142	)		(822	)		1,414
Total loss (gain) on interest rate swap	$	913		$	60		$	494		$	(1,947	)

The effect of remeasurement to fair value was recorded within the operating activities section and the monthly cash proceeds received or payments made were recorded within the investing activities section in the condensed consolidated statements of cash flows. See Note 7, Fair Value of Financial Instruments, for further discussion on the fair value measurement of the interest rate swap.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Accounting Standard Adopted

On June 30, 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also requires entities with investments in equity securities subject to contractual sale restrictions to disclose certain qualitative and quantitative information about such securities. The Company adopted this standard as of January 1, 2024. The adoption of this standard did not have an impact on the Company's financial statements or disclosures.

Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU intends to enhance disclosure related to significant segment expenses regularly provided to the Chief Operating Decision Maker (“CODM”), amounts presented as “other” within segment profit (loss), require that all annual disclosures are also reported for interim periods, further define the CODM and how they use segment profit (loss) to allocate resources, and require that entities with only a single reportable segment provide all required segment disclosures. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. This change will apply retrospectively to all periods presented. The adoption of this standard will only require changes to the Company's disclosures with no expected impact to its results of operations, financial position or cash flows. The Company is currently evaluating the impact of this standard on its financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires companies to disclose specific categories in the rate reconciliation, provide additional disclosure for reconciling items that exceed proscribed thresholds, and enhance disclosure regarding income taxes paid and sources of income (loss) from continuing operations including the tax expense (or benefit) disaggregated by federal, state and foreign taxes. The guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements.