Mobile Infrastructure signals $30M noncore asset sales by year-end as portfolio optimization advances

Earnings Call Insights: Mobile Infrastructure Corporation (BEEP) Q3 2025

MANAGEMENT VIEW

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Stephanie Hogue, CEO, indicated the third quarter results were "comparable to the second quarter, representing resilient performance against a challenging backdrop." She cited ongoing construction and longer redevelopment timelines as factors impacting revenue and net operating income (NOI). Monthly contract parking volumes rose 1.4% sequentially and 8% year-to-date, and residential monthly contracts increased approximately 75% year-over-year and nearly 60% since year-end. Hogue reported that residential and commercial monthly parking now comprises approximately 35% of trailing 12 months management agreement revenue.

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Hogue described positive trends in Cleveland, where "transient growth of 8% in the quarter over 2024's third quarter has been complementary with strong growth in residential and commercial monthly contracts, up over 50% year-over-year." She also highlighted improving conditions in Oklahoma City and noted that Cincinnati is positioned for a "step change in performance beginning in the first quarter of 2026 when the convention center is scheduled to reopen."

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The company completed an asset-backed securitization (ABS) transaction, providing "the needed flexibility for our plan to optimize our portfolio." Hogue stated, "we expect to have sold or be in contract to sell approximately $30 million in noncore assets by the end of the year, consistent with the capital plan we announced earlier this year."

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Hogue addressed diversification, mentioning, "we are seeing a growing recognition that EV charging is no longer simply an amenity to be offered to tenants" and outlined a measured investment approach to EV charging with a focus on profitability.

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Paul Gohr, CFO, stated, "Revenue was $9.1 million in the third quarter compared with $9.8 million in the third quarter of 2024. The lower year-over-year revenue was primarily due to lower transient volumes, reflecting lower nearby hotel occupancy, a reduced number of special events and lower associated attendance as well as continued construction-related impacts at several of our locations."

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Gohr reported, "Revenue Per Available Stall or RevPAS, a key metric we use to manage our portfolio, was $212 in the third quarter of 2025, consistent with our second quarter, but down 7.1% from $228 in the third quarter of 2024." He added, "Net operating income, or NOI, was $5.5 million, up modestly sequentially, but down from the $6.1 million in last year's third quarter."

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Gohr described the successful $100 million refinancing via an ABS of 19 facilities, noting, "With the proceeds, we refinanced $84.4 million of near-term debt, extending our maturities to 2030, while increasing our capital flexibility to pursue our portfolio optimization strategy."

OUTLOOK

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Hogue stated, "we expect a material step change in that district's activities" in Cincinnati when the convention center reopens in the first quarter of 2026, and also noted the expected completion of the Second Avenue corridor project in Nashville by December 2025. She added, "the factors impacting our results are understood, time-bound and fixed with diversification and most importantly, linked to projects that we believe will enhance long-term asset value."

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Hogue did not provide specific updated guidance figures, indicating, "we're anticipating, what we're anticipating, giving guidance with our year-end results in March."

FINANCIAL RESULTS

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Gohr specified that revenue was $9.1 million for Q3 2025, compared to $9.8 million for Q3 2024. RevPAS was $212, and NOI was $5.5 million, while adjusted EBITDA was $3.9 million with an adjusted EBITDA margin of 42.6%. Cash and restricted cash at quarter-end totaled $12.1 million, and total debt stood at $213 million. The company recorded a $2.5 million impairment related to normal property fair value testing and asset rotation strategy.

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Gohr also highlighted share repurchases: "we have repurchased over 1 million shares at an average price of $3.36 per share."

Q&A

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John Massocca, B. Riley Securities: Asked if disruptions from event demand drivers or construction would ease in Q4 or persist. Hogue responded, "it's going to be a little bit mixed...we should start to see some of that ease in Q4, but towards the end of Q4. And really, we're looking into 2026, where we start to see some real year-over-year pickup."

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Massocca questioned the use of proceeds from $30 million asset sales. Hogue explained, "in the near term, we'll focus on repaying the line of credit. But certainly considering as the acquisition pipeline shifts and that's more accretive to shareholders, we're evaluating with our broader Board every month."

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Massocca inquired about the impairment. Gohr answered, "The impairment of $2.5 million was just related to our normal testing that we do every quarter and evaluating fair value of the properties, and it just coincided with our asset rotation strategy and the evaluation that went along with that."

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Massocca also asked if the ABS transaction improved disposition flexibility. Hogue confirmed, "this is starting to set the balance sheet up for what we've talked about and using it as a tool for continued accretion to shareholders with more accretive properties."

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Kevin Steinke, Barrington Research: Probed on incremental disruptions in Fort Worth and Houston. Hogue replied, "A lot of the transient in those 2 in particular is around construction...the construction over the longer term will be positive for the portfolio. It just sort of hits in the short term."

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Steinke asked about actions to drive improved performance in 2026. Hogue said, "The single biggest item that we focus on is utilization...once you get to a stabilized level of utilization, then you really start to have the lever around pricing."

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Marc Riddick, Sidoti: Asked about RevPAS growth expectations. Hogue responded, "It's probably a little too early for that. I think we're anticipating, what we're anticipating, giving guidance with our year-end results in March."

SENTIMENT ANALYSIS

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Analysts maintained a neutral to slightly negative tone, pressing on headwinds, disruption timelines, and asset disposition details. They sought specifics on recovery timing, use of proceeds, and operational impacts, with follow-ups probing for clarity.

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Management's sentiment was measured, acknowledging headwinds and slower-than-expected recovery but expressing confidence in long-term fundamentals. Phrases such as "we remain optimistic" and "we are confident" were used, while also noting "it's probably a little too early for that" regarding guidance, signaling caution.

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Compared to the previous quarter, management maintained a similar cautious but optimistic tone, while analysts continued to focus on short-term disruptions and potential upside from asset sales and operational improvements.

QUARTER-OVER-QUARTER COMPARISON

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Guidance language shifted from expecting results at the "low end" of the annual range to deferring detailed guidance to the year-end call. There was greater emphasis on the impact of ongoing construction and the timing of event-driven demand recovery.

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Strategic focus advanced with the completion of the ABS transaction, enabling greater flexibility to execute asset rotation and optimize the balance sheet.

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Analysts continued to press for details on the magnitude and timing of recovery, asset sales, and operational strategy execution, consistent with prior quarters.

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Key metrics such as revenue and NOI were slightly lower than the previous year’s comparable quarter, with sequential stability but no major uptick. Management’s confidence in long-term fundamentals remained steady, but short-term caution persisted.

RISKS AND CONCERNS

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Management identified ongoing construction and longer redevelopment timelines in key markets as the main challenges, contributing to lower transient revenue and NOI.

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Hogue stated, "several of our core downtown markets continue to experience temporary defined headwinds, including long construction cycles, event cancellations and lower hotel occupancy, all of which pressured near-term results."

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The company is mitigating risks through diversification, focus on residential parking growth, asset rotation, and disciplined expense management. Hogue noted that "our employees and operating partners are navigating a challenging environment with professionalism and creativity."

FINAL TAKEAWAY

Mobile Infrastructure Corporation’s third quarter performance reflected ongoing challenges from construction and event-driven headwinds, but management emphasized resilient contract parking growth, a successful ABS refinancing, and asset rotation progress with $30 million in noncore sales targeted by year-end. The company’s strategic pivot toward recurring revenue streams and balance sheet flexibility underpins management’s confidence in long-term value realization as key market disruptions subside and redevelopment projects conclude in 2026.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/beep/earnings/transcripts]

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