Prepared remarks
Good afternoon, and welcome to the Mobile Infrastructure Corporation Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a Q&A session. If you would like to ask a question, please press 11 on your telephone. You will then hear an automated message advising that your hand is raised. If you would like to remove yourself from the queue, please press 11 again. And keep in mind that this call is being recorded. I would now like to turn the call over to Casey Kotary, investor relations representative. Please go ahead.
Thank you, operator. Good afternoon, everyone, and thank you for joining us to review Mobile's second quarter 2026 performance. With us today from Mobile are Stephanie L. Hogue, CEO, and Paul Gohr, CFO. In a moment, we will hear management's statements about the company's results of operations for the second quarter of 2026. Before we begin, we would like to remind everyone that today's discussion includes forward-looking statements, including projections and estimates of future events, business or industry trends, or business or financial results. Actual results may vary significantly from those statements and may be affected by the risks Mobile has identified in today's press release and those identified in its filings with the SEC, including Mobile's most recent annual report on Form 10-K and its most recent quarterly report on Form 10-Q. Mobile assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. Today's discussion also contains references to non-GAAP financial measures that Mobile believes provide useful information to its investors. These non-GAAP measures should not be considered in isolation from or as a substitute for GAAP results. Mobile's earnings release and the most recent quarterly report on Form 10-Q provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why Mobile uses these measures. I will now turn the call over to Mobile's CEO, Stephanie L. Hogue, to discuss second quarter 2026 performance. Stephanie?
Thank you, Casey, and good afternoon, everyone. Thank you for joining us today. I would like to begin our call by taking a moment to address the take-private proposal that was recently submitted by BOM Asset Management. A special committee of the Board of Directors is in the process of actively reviewing and evaluating the proposal. This process is underway and ongoing, and the special committee will determine the appropriate steps based on what it believes is in the best interest of the company and all of our shareholders. We will not be commenting further on this topic or speaking to this matter during our call today. With that update, let me now transition to our second quarter results which reflect continued execution against the initiatives we laid out for 2026. And more than that, they reflect a business that is performing. This was our second consecutive quarter of broad-based operating growth and the momentum is building. We set clear KPIs for ourselves and our operating partners at the start of this year. We measure against them regularly and take appropriate action to course-correct when necessary. As a result, we are meeting or exceeding those KPIs. In the second quarter, same-location NOI grew 12% year over year, reaching $5.9 million, up from $5.2 million, and we expect that momentum to continue throughout the year. Same-location revenue grew 5.6%, representing various demand drivers turning on or reactivating across our portfolio, resulting in growth both in transient and monthly parking. At the same time, we continued tight operating expense management, which reflects both our ongoing conversion to management contracts and the greater visibility and control they give us over operating performance. I am highly encouraged by the underlying operating story. Portfolio utilization on a trailing 12-month basis was 70%, up 5 percentage points year over year from 65%, and it climbed in every month of the quarter. Average utilization for the quarter was the highest it has been since we took control of this portfolio in 2021 and started tracking the data. As we have discussed, our focus on utilization through the recovery in our markets allows pricing to follow as demand strengthens. RevPAS reached approximately $225 in the quarter, the highest second-quarter RevPAS in the last three years, and on a trailing 12-month basis, RevPAS was over $200. Volume and rate are moving together, and that is direct credit to our team and our operating partners. We continue to hold our operating partners accountable to a specific set of key operating metrics each month: utilization, RevPAS, contract volume, and partner mix. Utilization is our leading indicator. It tells us precisely when an asset is ready for the next lever. As more of the portfolio crosses into stabilized occupancy, our optionality expands. We optimize the mix across contract, residential, and transient demand and we move rates in the specific bands where the market supports it rather than across the board. As discussed in prior quarters, we are changing operating partners who do not hit our KPIs, and we will continue to do so. The demand behind this quarter's numbers continues to accelerate. Contract volumes grew approximately 12% year over year and 7% sequentially, a clear signal of return-to-office momentum and steady absorption from the newly leased residential units across our markets. Return-to-office and downtown residential absorption are multi-quarter structural tailwinds. While they take time to realize, we are well-positioned in the markets where these secular trends are the strongest. Several of the markets that were dislocated by construction and redevelopment in prior quarters, such as Cincinnati and Nashville, are now firmly back online and that recovery is reflected in both our contract parking base and our transient volumes. Recovering markets, a growing contract base, and a full events calendar give us confidence in our performance for the balance of the year. As utilization driven by monthly consumers continues to grow throughout the portfolio, rate will become the longer-term focus. Average transient transactions also showed growth for the quarter, up 3% year over year, which is the appropriate comparison for transient due to the seasonality of that part of the business. Our Midwestern markets in particular stood out as strong performers, with Chicago, Cincinnati, and Milwaukee showing meaningful growth as well as strong metrics in Nashville. Part of Milwaukee's strength came from another asset transitioning from a lease to a management contract, giving us the ability to actively work with our operator, which remains a priority for all of our assets. We are carrying this momentum into the third quarter, which is seasonally our busiest and highest NOI period for the year. We enter it with utilization where we expected it to be, a contract base that is larger and still growing, and a full calendar of events across our markets. On capital allocation, we continue to put the balance sheet to work. We paid down $3.7 million of principal and $800 thousand of accrued interest on our line of credit during the quarter and we ended the quarter with total net debt of $197.1 million. Through our 36-month $100 million asset rotation program, cumulative proceeds from the assets sold have now exceeded $30 million at a weighted average implied capitalization rate of approximately 2%. The value our assets command in the private market continues to underscore the disconnect between that value and where our shares trade today. We are still actively working on the asset rotation program and making progress. We are currently negotiating approximately $25 million of transaction value that we expect to act upon under the right conditions. As always, we will move deliberately on the right transactions at the right terms, not speed for its own sake. Our playbook for 2026 remains unchanged: drive utilization, convert it into rate, rotate non-core assets at premium private market valuations, and continue to deleverage and professionalize the operating model. The second quarter is evidence that the playbook is working, and we are reaffirming our full-year 2026 guidance which Paul will now walk through. Paul?
Thank you, Stephanie. Good afternoon, everyone. I am pleased to discuss the financial details of our second quarter 2026 results and provide additional context on the remainder of the year. Total revenue was $8.9 million in the second quarter of 2026 compared to $9.0 million in the second quarter of 2025. The year-over-year decrease was primarily attributable to assets sold in 2025 and 2026. Excluding those dispositions, same-location revenue was $8.9 million, an increase of 5.6% versus the prior-year period. We believe the same-location comparison is the right way to evaluate the organic performance of our continuing portfolio. Contract parking volumes grew approximately 12% year over year and were up 7% quarter-over-quarter sequentially, with broad-based gains across several markets, including Cincinnati, Denver, and Fort Worth. Transient revenue grew 4% portfolio-wide as several key markets showed momentum following the completion of construction and redevelopment that we discussed last quarter. Cincinnati transactions were up year over year, supported by the convention center reopening, while markets such as Chicago also posted strong transaction growth aided by aggressive online marketing initiatives. Consistent with our volume-first, rate-second playbook previously described, we expect rate to follow as utilization stabilizes across the portfolio. Turning to expenses: property taxes were $1.4 million in the second quarter of 2026 compared with $1.8 million in the prior-year period. On a same-location basis, property taxes are down $300 thousand from the prior-year period. The year-over-year reduction in property taxes reflects continued benefits from our active property tax appeal management process. Property operating expenses were $1.6 million compared with $1.8 million in the second quarter of 2025. On a same-location basis, property operating expenses increased $100 thousand from the prior-year period, primarily on timing of some repairs and maintenance at our facilities. But overall, we have demonstrated continued expense discipline despite an inflationary cost environment. Consistent with the prior quarter, we are presenting net operating income, or NOI, on a same-location basis. Same-location NOI for the second quarter of 2026 was $5.9 million compared with $5.2 million for the same period in 2025, an increase of 12%. The increase reflects several factors working together: same-location revenue growth, the lease-to-management agreement conversions we completed over the past year, active property tax appeal management, and expense discipline. We delivered same-location NOI growth of about 2x our same-location revenue growth through these efforts. General and administrative expenses were $2.6 million compared to $2.4 million in the same period of 2025. Current period G&A includes $800 thousand of non-cash stock-based compensation, consistent with the $800 thousand in the prior-year quarter. Adjusted EBITDA was $4.1 million for the second quarter of 2026, compared to $3.8 million in the second quarter of 2025, an increase of 5.5%. This improvement further illustrates operating discipline alongside our same-location revenue growth for the quarter. Turning to the balance sheet: at 6/30/2026, we had $10.9 million of cash equivalents and restricted cash. Total net debt outstanding was $197.1 million, down from $200.0 million at the end of the first quarter. During the second quarter, we paid down $3.7 million and $800 thousand of accrued interest on our line of credit. As a reminder, this is in addition to the debt pay downs of $8.1 million on our CMBS facility in the first quarter of 2026. In total, we have repaid $22.6 million of debt using proceeds from the asset rotation strategy. As Stephanie mentioned, total proceeds to date from our 36-month $100 million asset rotation program were above $30 million. Reducing the cost of capital remains a primary use of disposition proceeds alongside opportunistic share repurchases and selective acquisitions of higher-quality assets. We are reaffirming our full-year 2026 guidance as initially provided with our fourth-quarter and full-year 2025 results and reiterated last quarter. For the full year, we continue to expect total revenue in the range of $35 million to $38 million representing approximately 4% growth at the midpoint over 2025 results, and approximately 8% growth on a same-location basis. We expect this to be accompanied by NOI in the range of $21.5 million to $23.0 million representing year-over-year growth of 7% at the midpoint and 10% growth on a same-location basis. Further, adjusted EBITDA is forecasted to range from $15.0 million to $16.5 million representing year-over-year growth of 10% at the midpoint and 13% growth on a same-location basis. Consistent with last quarter, this guidance reflects our expectations for continued contract volume growth, benefits of venue reopenings and recoveries across the portfolio, and the positive impact of our technology and pricing optimization initiatives. As a reminder, this guidance does not include any future asset sales or acquisitions under our asset rotation program. With that, I will turn the call back to Stephanie for closing remarks.
Thank you, Paul. Before we open the line for questions, I want to reiterate the broader perspective that we shared in Q1 on where we believe this business is headed over the longer term. Mobile Infrastructure owns hard assets, well-located land and access points in central business districts across the United States. We believe the long-term value of these assets is driven by three key characteristics. First, irreplaceability. The land we own sits in dynamic, supply-constrained urban cores where new parking real estate of this character is rarely created. As cities continue to invest in downtown revitalization, mixed-use redevelopment, and urban density, the access points we own become increasingly valuable. Second, optionality through adaptive reuse. Our portfolio is not simply a collection of parking structures. The land and structures provide platforms for a variety of potential uses: residential, hospitality, retail, EV charging infrastructure, last-mile logistics, and emerging mobility services. Our asset rotation program demonstrates this underlying value and the demand for well-located urban real estate. Third, the ability to meet future mobility wherever it lands on the adoption curve. The future of mobility will continue to evolve, and there is uncertainty around how that evolution will unfold. What remains consistent is the need for access points where vehicles and people arrive, dwell, and depart. Our portfolio sits at those access points today and can adapt to a range of future mobility trends. The second quarter is another step forward, and we are encouraged to see both volume and rate contribute to results. We remain confident in our 2026 plan. The underlying value of our portfolio, as reflected in our internal NAV, is significantly above the current trading value of our shares. Our focus remains on executing our strategy, unlocking value for our assets, and maintaining a disciplined, shareholder-first approach to capital allocation. Thank you for your support, your questions, and your engagement with Mobile Infrastructure. Operator, please open the line for questions.
Questions and answers
Thank you. Please press 11 on your telephone. You will hear an automated message advising that your hand is raised. If you would like to remove yourself, press 11 again. We also ask that you wait for your name and company to be announced. Our first question of the day is coming from the line of John Massocca of B. Riley Securities. Please go ahead.
Good afternoon. Maybe starting off with the capital recycling plan: you mentioned you have $25 million of transactions that you are working on. What is the stage of those? Is that something that is expected to close over the remainder of the year? Could it take longer than that? I know you have laid out a specific guideline over a three-year period, but I was hoping for some color on the $25 million number you cited. I know you are not commenting on the take-private offer that was mentioned earlier, but would that impact the capital recycling program at all?
Hey, John. To your first question, all of those are under active negotiation. As we commented in the prepared remarks, we do not sell for the sake of selling. So right buyer, right price point — we are targeting that sub-3% cap rate, and we are staying really fixated on that. Could they close by the end of the year? Yes, that is what we are working towards, and we are continuing to look at non-core assets within that framework. But timing can always slide a bit. To your second question, we cannot comment at all on that matter until we have an update, but right now it is business as usual and our focus remains on the sale of non-core assets.
Okay. And then in terms of the in-place portfolio, you mentioned an occupancy-first, rate-second strategy. It is starting to show through within your assets. Can you call out any specific examples where you are seeing that? I assume at this point some properties are at a run-rate occupancy that would make sense to push rate. Curious for any color on how that is flowing through the portfolio today.
It is asset-specific and market-specific. We are targeting utilizations that are toward stabilized levels, and that varies by garage. We have seen some markets — I think we have mentioned Cleveland in the past — Cincinnati is getting towards a stabilized utilization where rate tends to follow. One important part of how we evaluate this portfolio is we break down every type of user. Right now, getting monthly contracts is the most important, but it still gives you an option to update rates in things like transient or overnight and hotel. So within specific rate bands, we are seeing some level of rate increases, but it is not even across the board.
And then on the operating expense side of things, continued downward pressure there compared to 2025 — is that something that can continue to trend down? Or would you consider Q2 a good run rate when adjusting for seasonality?
I think there is a trend line to go down. Q2 is a little bit higher than we had anticipated, but we expect it to moderate down a little bit in Q3 and Q4.
Okay. I will hop back in the queue. Thank you very much.
Thanks, John.
One moment for the next question, please. Next question is coming from the line of Kevin Steinke of Barrington Research Associates. Please go ahead.
Great. Thank you. Just wanted to ask you about the contract parking volume growth of 12%. This is a nice number and an acceleration from the percent in the first quarter. Is there anything meaningful you would want to highlight there in terms of the faster growth? I know you talked about both return-to-office as well as residential, but any more color you could provide? Also, you mentioned that rate contributed to your same-location revenue growth in the quarter. Are you able to parse that out on a consolidated basis in terms of percentage point contribution, or do you only look at it on an asset-by-asset basis? You sounded optimistic about the second half; any more color on the visibility into the second half? And with transient parking, which I believe grew in the quarter, would you attribute that mainly to disrupted assets coming back to utilization as construction ends in Cincinnati, Nashville, etc., or any more insight on the transient side?
I think the nice thing about the contract growth is it builds on itself through the year. We have been very focused on it. First quarter is always our seasonally slowest quarter; second quarter is when we see that return-to-office trend really pick up, and we anticipate that remaining into the third quarter. The same is true with new leasing coming online and actually being leased up. So it is not a surprise that it happened finally — we've been talking about it for a year — but it is nice to see it come to fruition. On rate versus volume, we look at it asset by asset internally. Predominantly, the revenue expansion came from utilization growth — volume first, rate second. Once you have a full garage, you have pricing power, and we are staying extraordinarily disciplined to ensure parkers are in the door, satisfied with the product, and then become sticky consumers. Regarding transient parking, much of the improvement is related to assets coming back online as construction ends and venues reopen — the convention center you referenced in Cincinnati is a clear example — and there was a modest rate expansion as well.
Okay. Thanks for taking the questions. I will turn it back over.
One moment for the next question, please. Our next question is coming from the line of Marc Riddick of Sidoti. Please go ahead.
Hey. Good afternoon. You mentioned events a couple of times. Could you talk a bit about what the calendar looks like, whether it is third-quarter or fourth-quarter weighted, and perhaps the comparisons you have there? What is giving you confidence on the event side?
Sure. Third quarter is historically always the busiest. You have a number of sports events, concerts, and downtown events. We have had a number of demand drivers reopen and that contributes to more events, more people downtown, and more hotel stays.
Great. On the question around rate and utilization: is there a general range we should be thinking about that signals the shift from volume-first to rate-focused actions? Any ballpark range for comfort levels?
It really depends on the asset. For a garage, which is a much larger asset, it takes more to fill it, so you might hit a stabilized point somewhere between 80% and 100% utilization where you start to push on rate. In a parking lot that turns more frequently, utilization can be 300% to 400%, and that still may not be stabilized. So it depends on the type of asset and the market dynamics.
Okay. And maybe give your thoughts on the labor side of the equation: current levels, any needs to add given the utilization, and how should we think about labor?
It should not change materially. The great thing about parking assets is they are largely fixed-cost.
Thank you.
Thanks, Marc.
One moment, please, for the next question. The next question is coming from the line of Michael Diana of Maximum Group. Please go ahead.
Hi. Thank you. Transient is seasonal with third quarter probably being the biggest. Could you comment on seasonality? Also, if transient starts picking up the way you hope, how significant is that and what percentage of revenue is transient?
Third quarter is always the largest quarter and the busiest, and it is the most dynamic from demand drivers. You have sports events, conventions, hotel stays, and vacations — all feed into utilization. We anticipate continued activity because we have a number of demand drivers that have reopened, specifically in Cincinnati, Denver, and Nashville as construction has ended in those markets.
Right. And how big could transient be as a share of revenue?
About two-thirds of our revenue is transient and one-third is contract.
Okay. Great. Thank you.
Thank you.
There are no more questions in the queue. That concludes today's programming. Thank you all for joining. You may now disconnect.