Mobile Infrastructure Corporation Common Stock 2026 Q2 Earnings Call

Good afternoon, everyone, and thank you for joining us to review Mobile's second quarter 2026 performance. With us today from Mobile are Stephanie Hogue, CEO, and Paul Gohr, CFO. In a moment, we will hear management 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 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 Blackstone Alternative 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. 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. 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 approximately 70%, up five 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 parker 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 gives us confidence in our performance for the balance of the year. As utilization driven by monthly consumers continues to grow through the portfolio, rates 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 $0.8 million 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. 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 de-leverage 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 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.