Q1 2025 Mobile Infrastructure Corp Earnings Call

Operator: Good day and welcome to the Mobile Infrastructure Corporation First Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Good day and welcome to the mobile infrastructure Corporation first quarter 2025 earnings Conference call.

All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded.

After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.

Please note this event is being recorded.

Casey Kotary: I would now like to turn the conference over to Casey Kotary, Investor Relations Representative. Please go ahead. Thank you, Operator.

Speaker Change: I would now like to turn the conference over to Casey Coterie Investor Relations Representative. Please go ahead. Thank you operator.

Casey Kotary: Good morning, everyone, and thank you for joining us to review Mobile's first quarter 2025 performance. With us today from Mobile are Manuel Chavez, CEO, and Stephanie Hogue, President. In a moment, we will hear management statements about the company's results of operations as of the first quarter of 2025.

Manuel Chavez: Good morning, everyone and thank you for joining us to review Mobiles first quarter 'twenty twenty-five performance with US today from mobile are manual Chavez C E O and Stephanie Hope President.

Manuel Chavez: Moment, we will hear managements statements about the company's results of operations as of the first quarter of 2025.

Casey Kotary: 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, and 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.

Manuel Chavez: 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 and 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.

Manuel Chavez: 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.

Manuel Chavez: 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 it provides useful information to its investors. These non-GAAP measures should not be considered in isolation from or as a substitute for GAAP results.

Casey Kotary: 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 reasons why Mobile uses these measures.

Manuel Chavez: <unk> 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 reasons why mobile uses these measures I will now turn the call over to mobile mobile C. E. O manual Chavez did you discuss the first quarter 'twenty twenty-five performance menu.

Casey Kotary: I will now turn the call over to Mobile's CEO, Manuel Chavez, to discuss first quarter 2025 performance. Manuel? Thank you, Casey.

Manuel Chavez: And thank you all for participating in today's call to review our first quarter results and discuss our business outlook. start off, underlying operating metrics moved in the right direction. and the strategic pillars we detailed in March are firmly on track. That said, seasonal headwinds and some other factors mutated top line growth in Q1. Our infrastructure and consumer lens combined with improved data is guiding disciplined capital deployment and positioning mobile infrastructure for value creation.

Speaker Change: Thank you Casey and thank you all for participating in today's call to review, our first quarter results and discuss our business outlook.

Speaker Change: To start off underlying operating metrics moved in the right direction and the strategic pillars. We detailed in March are firmly on track.

Speaker Change: That's sad seasonal headwinds and some other factors muted top line growth in Q1.

Speaker Change: Our infrastructure and consumer when combined with improved data is guiding disciplined capital deployment and positioning mobile infrastructure for value creation.

Manuel Chavez: Before we get into the details, I'd like to reground you on the long-term journey that guides are at. When we spoke in early March, barely seven weeks ago, we set out a multi-year, multi-pronged strategy consisting of two primary focus areas. Our first focus area, as expected, is to continue to convert the balance of our core portfolio into management agreements, driving increased utilization via increasing our monthly residential and commercial contracts. The second focus area is our Portfolio Optimization Strategy, in which we aim to rotate out certain parking assets that have greater value for alternative stakeholders than they do as long-term assets in our portfolio.

Speaker Change: Before we get into the details I'd like to re ground you on a long term journey that guides our actions.

Speaker Change: When we spoke in early March barely seven weeks ago.

Speaker Change: We set out a multi year multi pronged strategy consisting of two primary focus areas.

Speaker Change: Our first focus area is expected to continue to convert the balance of our core portfolio into management agreements driving increased utilization and increasing our monthly residential and commercial contracts.

Speaker Change: Our second focus area is our portfolio optimization strategy and once we aimed to rotate out of certain parking assets that have greater volume for alternative stakeholders than they do as long term assets in our portfolio.

Manuel Chavez: into new assets that will closely align with the key characteristics of our core portfolio, ultimately maximizing value for our mobile shareholders. As a reminder, our core portfolio is defined as parking structures that are near multiple demand drivers and likely clustered close to assets that are already in our portfolio. We believe rotating the non-core segment of Mobile's portfolio can generate at least $100 million of proceeds that can be used to reinvest into our robust acquisition pipeline. Second, our team sees a meaningful opportunity to further leverage data and enhance processes and use rigorous management of our core portfolio to increase asset utilization and grow NOI.

Speaker Change: Into new assets that were more closely aligned with the key characteristics of our core portfolio.

Speaker Change: Ultimately maximizing value for our shareholders.

Speaker Change: As a reminder, our coal portfolio defined as parking structures that are near multiple demand drivers and likely clustered close to assets that are already in our portfolio.

Speaker Change: We believe rotating the noncore segment of Mobile's portfolio can generate at least $100 million of proceeds that can be used to reinvest into our robust acquisition pipeline.

Speaker Change: Second our team sees a meaningful opportunity to further leverage data.

Speaker Change: Hence processes and use rigorous management of our coal portfolio to increase.

Speaker Change: Utilization and grow NOI.

Manuel Chavez: Because specialized parking properties do not change hands quickly, this takes time and today's remarks are meant as a progress report on initiatives whose most visible milestones will surface over the coming quarter. Mobile infrastructure's garages occupy a distinctive niche. They are hard infrastructure, essential nodes in the flow of urban mobility. yet also behave like consumer microcosms. their performance rising and falling in the daily human pattern.

Speaker Change: Because specialized parking properties do not change hands quickly. It takes time in today's remarks are meant as a progress report on the initiatives most visible milestones will surface over the coming quarters.

Speaker Change: Mobile infrastructures garages occupy.

Mitch: Thanks Mitch.

Mitch: They are hard infrastructure essential nodes in the flow of urban mobility.

Mitch: It also behave like consumer microcosm.

Mitch: Their performance is rising or falling in the dailies even patterns.

Manuel Chavez: That dual nature shaped the first quarter story. The first quarter is our lightest season, and this year was no different. Adding to the typical seasonality, weather proved harsher than usual, construction disrupted several central business district corridors, and in Cincinnati, one of our largest markets, the convention center closed for renovation, creating less demand in our transient and overnight hotel traffic.

Mitch: That dual nature since the first quarter story.

Mitch: But first quarter is our lightest season, and this year was no different.

Mitch: Adding to the typical seasonality weather proved harsher than usual construction disrupted several central business district corridors and in Cincinnati, one of our largest markets.

Mitch: Veteran center closed for renovation, creating less demand and our transient and overnight hotel traffic.

Manuel Chavez: Even so, the team delivered a solid opening 90 days of 2025. Business Development Outreach secured more than 250 net new monthly contracts and lifted contract volume sequentially at essentially flat prices. Our pipeline for new monthly business continues to grow, evidence that our go-to-market discipline is taking hold. Transient transactions declined versus the prior year quarter, but average transient rate rose, demonstrating the levers that we have at our disposal to protect price given when volume is soft. We also saw encouraging early signs from a wave of downtown residential conversions. For example, the Mercantile and the newly opened 1 West 7th Apartments in Cincinnati are seeing success in leasing even through the first quarter, a time when people are less likely to move.

Mitch: Even so the team delivered a solid opening 90 days of 2025.

Mitch: Business development outreach secured more than 250, net new monthly contracts and lifted contracted volume sequentially and essentially flat pricing.

Mitch: Our pipeline for new monthly business continues to grow evidenced that our go to market discipline is taking hold.

Mitch: Granted these transactions declined versus the prior year quarter, but average transient rate grows demonstrating the levers that we have at our disposal to protect price even when volume is softer.

Mitch: We also saw encouraging early signs from wave of downtown residential conversions for example, the mercantile and the newly opened the Onewest seventh apartments in Cincinnati.

Mitch: Let me see even for the first quarter a time when people are less likely to move.

Manuel Chavez: We are seeing some demand for parking from these new lessees, although there is some late sensitivity early on. Experience tells us that sustained higher use eventually converts to pricing power, and we will remain patient with our pricing lever until that threshold is reached. 29 of our 40 garages are now under management contract. By the end of calendar year 2025, we will have transitioned 75% of our portfolio to run under management contracts, with the balance scheduled for conversion in 2026 and 2027. Management contracts allow for full rate autonomy, transparent cost structures, and crucially, granular data on utilization, parker mix, and rate elasticity.

Mitch: We are seeing some demand for parking from these new lassi is although there is some rate sensitivity early on.

Mitch: Experience tells us that sustained higher units eventually converts the pricing power and we will remain patient with a pricing lever until that threshold is reached.

Mitch: One nine of our 40 garages are now under management contracts by the end of calendar year 2025, we will have transitioned 75% of our portfolio to run under management contracts with the balance scheduled for conversion in 2026 and 2027.

Mitch: Management contracts allow for full rate autonomy transparent cost structures, and crucially granular data, our utilization Parker mix and rate elasticity.

Manuel Chavez: That data allows us to fine-tune decisions with a precision, unavailable, previous.

Mitch: That data allows us to fine tune decisions with a precision I'm available previously.

Manuel Chavez: Building a data-driven decision process has taken time, and we believe the effects will become more obvious later this year and into 2026. Portfolio optimization remains an important pillar of our strategy. Last year's sale of three assets at attractive multiples confirmed the latent value of our real estate holding. These three assets were sold at a sub 2% capitalization rate on NOI. which is a function of our assets, often playing a critical role in the real estate development plans of alternative stakeholders.

Mitch: Building a data driven decision process has taken time and we believe the effects will become more obvious later this year and into 2026.

Mitch: Portfolio optimization remains an important pillar of our strategy.

Mitch: Last year's sale of three assets at attractive multiples confirmed the latent value of our real estate holdings.

Mitch: These three assets were sold at a sub 2% capitalization rate on NOI.

Mitch: Which is a function of our assets after playing a critical role in the real estate development plans of alternative stakeholders.

Manuel Chavez: Building on that success, we have launched a 36-month disposition program targeting roughly $100 million of non-corp properties whose value will be derived from the underlying land for equally as importantly, the buyer who would like to control the parking experience for their customers or employees. Proceeds will be redeployed into locations supported by multiple demand drivers and higher net operating income potential in markets where we already hold scale advantage. We are working towards roughly one-third of those assets to be under active negotiations or in contract by year-end, and we are preparing the balance sheet accordingly. Over the past quarter, we evaluated debt facilities, including term debt.

Mitch: Building on that success, we have launched a 36 month disposition program targeting roughly $100 million of noncore properties, whose value will be derived from the underlying land for equally as importantly, the buyer who would like to control the parking experience for their customers or employees.

Mitch: Proceeds will be redeployed into locations supported by multiple demand drivers and higher net operating income potential in markets, where we already hold scale advantages.

Mitch: We are working towards roughly one third of those assets to be under active negotiations or in contract by year end and we are preparing our balance sheet accordingly.

Mitch: Over the past quarter, we evaluated debt facilities, including term debt pool.

Manuel Chavez: pooled asset debt, and single asset level facilities to ensure we can close sales swiftly and reallocate the capital in a manner that is accretive to shareholders.

Mitch: Old asset debt and.

Mitch: And single asset level facilities to ensure we can close sales swiftly and reallocate the capital in a manner that is accretive to shareholders.

Manuel Chavez: Looking beyond the traditional parking income, we are layering complimentary revenue streams into the portfolio. Revenue sharing negotiations are in late stages for electric vehicle charging at several garages. as is the longer-term vehicle storage and assets that have greater availability throughout the year. and Exploratory Discussions with Autonomous Vehicle Operators Continued. positioning our centrally located assets as future fleet hubs. Each initiative is intended to add durable cash flow and enhance asset value.

Mitch: Looking beyond the traditional parking income, we're layering complementary revenue streams into the portfolio.

Mitch: Revenue sharing negotiations are in late stages for electric vehicle charging at several garages.

Mitch: As is the longer term vehicle storage and assets that have greater availability throughout the year.

Mitch: And exploratory discussions with autonomous vehicle operators continue.

Mitch: Positioning our centrally located assets as future 40 hubs.

Mitch: Each initiative is intended to add durable cash flow and enhanced asset value.

Manuel Chavez: We look forward to sharing more details on those initiatives in coming quarters.

Mitch: We look forward to sharing more details on those initiatives in coming quarters.

Manuel Chavez: Again, in short, seasonal headwinds muted top-line growth, yet the underlying operating metrics moved in the right direction and the strategic pillars we detailed in March are firmly on track. Our infrastructure plus consumer lens combined with ever richer data is guiding disciplined capital deployment and positioning mobile infrastructure for sustained value creation.

Mitch: Again in short seasonal happens muted topline growth you have the underlying operating metrics moved in the right direction and the strategic pillars. We detailed in March are firmly on track.

Mitch: Our infrastructure plus consumer loans combined with ever Richard data is guiding disciplined capital deployment and positioning mobile infrastructure for sustained value creation.

Manuel Chavez: Thank you for your time and continued support.

Thank you for your time and continued support I will now turn the call over to our President Stephanie.

Stephanie Hogue: I will now turn the call over to our President, Stephanie Hogue, who will elaborate on our financial performance through the quarter. Stephanie. Good morning, everyone, and thank you, Manuel.

Speaker Change: Definitely hope who will elaborate on our financial performance for the quarter.

Mitch: Okay.

Speaker Change: Good morning, everyone and thank you Emmanuel.

Stephanie Hogue: My remarks today will move through three interconnected topics, our balance sheet efforts, the financial performance of our assets, and importantly, our path forward. Starting with our balance sheet, as you recall, last September we put a $40 million credit facility in place to give holders of our preferred stock a cash option, rather than converting into common shares and immediately selling in the open market, which not only would have resulted in substantial dilution, but also created downward pressure on a thinly traded stock. In addition, and as importantly, we reinstated the dividend to those shareholders, which is a core reason that they made the investment in the first place.

Speaker Change: My remarks today I will make sure. It was three interconnected topics our balance sheet efforts the financial performance of our assets and importantly, our path forward.

Speaker Change: With our balance sheet as you recall last September we put up $40 million credit facility in place to get holders of our preferred stock cash option rather than converting into common shares and immediately selling in the open market. It's not only what has resulted in substantial dilution, but also creates downward pressure.

Speaker Change: On a thinly traded stock.

Speaker Change: In addition, and as importantly, we reinstated the dividend to the shareholders, which was a quarter reason that they made the investment in the first place.

Stephanie Hogue: That facility is doing its job. During the first quarter, we redeemed just $1.2 million of preferred, which is the lowest quarter of redemptions or conversions since early 2024. The preferred outstanding now sits at $19 million, down from $39.5 million at the start of last year. At the same time, we continue to repurchase common shares. We have repurchased approximately 82,000 shares this quarter at an average price of $3.23. Our internal NAV remains $7.25 per share, which does not credit our assets for their operational value or replacement value per share. Considering material discount of mobile stock price relative to NAV, we intend to continue taking potential dilution off the table by settling preferred redemptions with cash and buying back our stock in the open market.

Speaker Change: That facility is doing its job during the first quarter, we redeemed just $1.2 million of preferred which is the lowest quarter of redemptions of our conversion since early 2024.

Speaker Change: The preferred outstanding now sits at $19 million down from 39, and a half a million dollars at the start of last year.

Speaker Change: At the same time, we have continued to repurchase common shares we have repurchased approximately 82000 shares this quarter at an average price of $3.23 or.

Speaker Change: Our internal NAV remains $7.25 per share, which does not credit our assets for their operational value or replacement value premiums.

Speaker Change: Considering material discount as <unk> stock price relative to NAV, we intend to continue taking potential dilution off the table by settling preferred redemptions with cash and buying back our stock in the open market.

Stephanie Hogue: This dovetails into our financing strategy. After refinancing $87.5 million of secured debt late last year, we are now working through our debt maturities through 2027 and evaluating alternative structures that offer flexibility around our capital rotation strategy of non-core assets. Traditional CMBS is restricted with asset sales, redeployment of capital and operating changes like leases to management contracts.

Speaker Change: This dovetails into our financing strategy after refinancing 87, and a half million dollars a secured that late last year. We are now working through our debt maturities through 2027, and evaluating alternative structures that offer flexibility around our capital rotation strategy of noncore assets.

Speaker Change: Traditional see MBS is restricted with asset sales redeployment of capital and operating changes like leases to management contracts.

Stephanie Hogue: As a result, we believe that continued focus on enhancing our balance sheet is an important value driver longer term, and it will allow us to continue to execute on our strategy.

Speaker Change: As a result, we believe our continued focus on enhancing our balance sheet is an important value driver longer term.

Speaker Change: Well allow us to continue to execute on our strategy.

Stephanie Hogue: With that backdrop in place, let's turn to what's happening inside the assets themselves. The shift to management contracts is paying dividends. Today, most of our revenue is recorded on an accrual basis, giving us a clear view of operating performance. Once we strip out performance from Detroit, which I will discuss shortly, revenue per available stall increased 1% year over year in the first quarter. Because an empty space can never be resold, our first priority is increasing utilization. And once this metric meets satisfactory thresholds, we will look to optimize price. Better data is also reshaping our revenue mix.

Speaker Change: With that backdrop in place, let's turn to you what's happening inside the assets themselves the shifts to management contracts is paying dividends today.

Speaker Change: Today, most of our revenue is recorded on an accrual basis, giving us a clear view of operating performance.

Speaker Change: Once we strip out performance from Detroit, which I will discuss shortly super available store increased 1% year over year in the first quarter.

Speaker Change: It wasn't empty space can never be resold, our first priority is increasing utilization.

Speaker Change: Once this metric meet satisfactory thresholds, we will look to optimize price.

Speaker Change: Better data is also reshaping our revenue mix, mostly a contract parking currently represents more than 35% of management contract parking revenue, providing stickier cashflow in smoothing the seasonality inherent in transient demand.

Stephanie Hogue: Monthly or contract parking currently represents more than 35% of management contract parking revenue, providing stickier cash flow and smoothing the seasonality inherent in transient demand. The accounting noise that once clouded period-to-period comparisons is largely behind us, and we can now measure performance on a truly apples-to-apples basis. Underpinning this progress is the improvement in parking technology, allowing us to make data-informed decisions. License plate recognition, data aggregation, and other tools are giving us granular insights into consumer behavior. Peaks and Valleys of Utilization, the Ability to Charge Consumers According to Their Usage Needs, and Pricing Sensitivities that May Not Have Been Obvious with Older Technology.

Speaker Change: Accounting noise that once clouded period to period comparisons is largely behind us and we can now measure our performance on a truly apples to apples basis.

Speaker Change: Underpinning this progress is being proven in targeting technology, allowing us to make data informed decisions license plate recognition data aggregation and other tools are giving us granular insights into consumer behavior.

Speaker Change: Peaks and valleys in utilization and your ability to charge consumers. According to their usage needs and pricing sensitivities that may not have been obvious with older technologies.

Stephanie Hogue: We continuously evaluate our third-party operators on a simple metric. Who can deliver accurate, actionable data the fastest so we can adjust accordingly?

Speaker Change: We continuously evaluate our third party operators on a simple metric you can deliver accurate actionable data the fastest so we can adjust accordingly.

Stephanie Hogue: Looking ahead, our road map is clear. First and foremost, we intend to continue to reposition our balance sheet through a more flexible debt facility that supports our non-core asset rotation and reduces refinancing risks. We will maintain rigorous capital allocation discipline, balancing shared purchases against investing in assets or revenue-generating upgrades to our current facilities. And finally, we will evaluate data faster with our operators to make more informed decisions to drive increased utilization.

Speaker Change: Looking ahead, our roadmap is clear first and foremost we intend to continue to reposition our balance sheet through a more flexible debt facility that supports our noncore asset rotation and reduces refinancing risk we will maintain a rigorous capital allocation discipline.

Speaker Change: I think share repurchases against investing in assets or revenue generating upgrades to our current facilities.

Speaker Change: And finally, we will evaluate data faster and our operators to make more informed decisions to drive increased utilization.

Stephanie Hogue: Now let's move on to our first quarter results. Financial results for the first quarter still have some element of lease conversion to management contract noise within the results. As the percent rent leases recognized revenue on an as-collected cash basis, first quarter revenue of 2024 had a $600,000 benefit for activity occurring in the fourth quarter of 2023. Revenue of $8.2 million in the first quarter was stable compared to 2024 operating revenue when adjusting for this accounting. That said, on a gap basis, revenue decreased 6.7% from $8.8 million in the first quarter of 2020. Revenue per available stall, or RESPAS, a key metric we use to manage our portfolio was down modestly in the first quarter.

Speaker Change: Now, let's move onto our first quarter results.

Speaker Change: Financial results for the first quarter still have some element of lease convergent to management contract noise within the results.

Speaker Change: The percent rent me says recognized revenue on an as collected cash basis first quarter revenue of 2024 had a $600000 benefit for activity occurring in the fourth quarter of 2023 revenue of $8 $2 million in the first quarter was stable compared to 2020 for operating revenue when it.

Speaker Change: Adjusting for this accounting change that said on a GAAP basis revenue decreased six 7% from $8 $8 million in the first quarter of 2024.

Speaker Change: Revenue per available stall or rest pass a key metric we use to manage our portfolio was down modestly in the first quarter. However.

Stephanie Hogue: However, we have provided an adjusted RESPAS that excludes our Detroit location to give a clearer view of our business progress. Detroit is one of our larger assets, and we spoke previously about the headwind this asset faces, but also of the longer-term opportunity we believe the redevelopment in Detroit creates. As a result, including it in ResPath skews our year-over-year comparisons for the remainder of the portfolio. Excluding Detroit, same location ResPath was $184 per stall as compared to $183 per stall in the prior year, driven by modestly higher overall utilization, stronger transient and residential pricing rates, and an increase in corporate monthly parking.

Speaker Change: However, we have provided an adjusted Rev path that excludes our Detroit location to give a clear view of our business progress.

Speaker Change: Detroit is one of our larger assets and we spoke previously about the headwind to this asset bases, but also of the longer term opportunity. We believe the redevelopment in Detroit creates.

Speaker Change: As a result, including it in rats task easier year over year comparisons for the remainder of the portfolio.

Speaker Change: Excluding Detroit St location rest pass was $184 per store as compared to $183 per store in the prior year driven by modestly higher overall utilization stronger transient and residential pricing rates and an increase in corporate monthly parking.

Stephanie Hogue: As we convert more assets to management contracts and a larger portion of our portfolio is included in the calculation, our ResPath metric will become an increasingly valuable measure of our performance, offering a more clear and comprehensive view of our business.

Speaker Change: As we convert more assets to management contracts and a larger portion of our portfolio is included in the calculation or Red pass metric will become an increasingly valuable measure of our performance offering a more clear and comprehensive view of our business that said as a reminder, our first quarter is typically seasonally slow.

Stephanie Hogue: That said, as a reminder, our first quarter is typically seasonally slow and we experienced several quarter-specific impacts that further affected performance, namely significant weather in the Midwest, temporary road closures, and the temporary closure of Cincinnati's Convention Center for a $240 million upgrade. Property operating expenses were $1.9 million compared to $1.5 million in last year's first quarter. The increase primarily resulted from the shift to management contracts and the related accounting treatment of recognizing asset-level expenses within our financial statements. Property taxes were $1.9 million, approximately flat compared to last year. Net Operating Income, or NOI, was $4.5 million, about 17% from last year's first quarter.

Speaker Change: And we experienced several quarter specific impacts that further affected performance, namely significant weather in the Midwest.

Speaker Change: Great pleasures, and the temporary closure of Cincinnati as Convention center for $240 million upgrade.

Speaker Change: Property operating expenses were $1 $9 million compared to $1 $5 million in last year's first quarter. The increase primarily resulted from the shift to management contracts and the related accounting treatment of recognizing asset level expenses within our financial statements.

Speaker Change: Property taxes were one $9 million approximately flat compared to last year.

Speaker Change: Net operating income or NOI was $4 $5 million down 17% from last year's first quarter last year's NOI included the previously mentioned $600000 of revenue that essentially dropped entirely to the bottom line.

Stephanie Hogue: Last year's NOI included the previously mentioned $600,000 of revenue that essentially dropped entirely to the bottom line. General and administrative expenses of $1.3 million were slightly up from $1.2 million in the prior year's first quarter. This excluded non-cash compensation of $700,000 in the current year quarter compared with $1.8 million of non-cash comp in the prior year quarter. We continue to believe that the portfolio can scale significantly while corporate G&A can be held roughly flat. Adjusted EBITDA was $2.7 million, down about 21% from $3.5 million in the prior year, and adjusted EBITDA margin was 33.4%. It is worth noting here, too, that the $600,000 of prior period revenue increased profitability by a similar amount, explaining much of the year-to-date.

Speaker Change: General and administrative expenses of $1 $3 million were slightly up from $1.2 million in the prior year's first quarter.

Speaker Change: This exclude a noncash compensation of $700000 in the current year quarter, compared with $1 $8 million of noncash comp in the prior year quarter. We continue to believe that the portfolio can scale significantly while corporate G&A can be held roughly flat.

Speaker Change: Adjusted EBITDA was $2 $7 million down about 21% from $3 $5 million in the prior year and adjusted EBITDA margin was 33, 4%. It is worth noting here too that the $600000 of prior period revenue increased profitability Biosimilar now explaining much of the year to date change.

Speaker Change: <unk>.

Stephanie Hogue: Turning to our balance sheet, at the end of the first quarter, Mobile Infrastructure had $16 million of cash and restricted cash on hand. We ended the quarter with total debt outstanding of $214 million, compared with $213 million at the end of 2024. While our first quarter is always seasonally slow, we remain confident in our annual plan and are maintaining our 2025 guidance for revenue of $37 million to $40 million. Net Operating Income, or NOI, for 2025 is still expected to range from $23.5 million to $25 million, representing year-on-year growth of 7% at the mid-period. We expect adjusted EBITDA to be between $16.5 million and $18 million.

Speaker Change: Turning to our balance sheet at the end of the first quarter mobile infrastructure had $16 million of cash and restricted cash on hand, we ended the quarter with total debt outstanding of $214 million compared with $213 million at the end of 2024.

Speaker Change: Well the first quarter is always seasonally slow we remain confident in our annual plan and are maintaining our 2025 guidance for revenue of $37 million to $40 million net operating income or NOI for 2025 is still expected to range from 23, and a half billion dollars to $25 million representing year on year.

Speaker Change: That's up 7% at the midpoint, we expect adjusted EBITDA to be between 16, and a half million dollars and $18 million.

Stephanie Hogue: To close, the heavy lifting of 2024, contract conversions, refinancing groundwork, and capital structure redesign is translating into more consistent revenue approval. Sharper Operating Insights, and I believe, a stronger platform for growth. We have more work ahead, but the trajectory is positive and unmistakable.

Speaker Change: Close the heavy lifting of 'twenty 'twenty four contract convergence refinancing groundwork.

Capital structure redesign is translating into more consistent revenue accrual.

Speaker Change: Her operating insights and I believe a stronger platform for growth. We have more work ahead, but the trajectory is positive and unmistakable. Thank you for your continued support of mobile infrastructure and with that I'll turn the call to the operator to open the line for questions.

Operator: Thank you for your continued support of mobile infrastructure, and with that, I will turn the call to the operator to open the line for questions. We will now begin the question and answer session. ask a question, you may press star then 1 on your telephone. If you are using a speakerphone, please pick up your handset before pressing the button. at any time your question has been addressed. to withdraw your question, please press star then.

We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two at the.

Operator: At this time, we will pause momentarily to assemble our rocket.

Speaker Change: This time, we will pause momentarily to assemble our roster.

Speaker Change: Yeah.

John Massocca: First question comes from John Massocca. B.

Speaker Change: And the first question comes from John Mass Coca with B Riley. Please go ahead.

Stephanie Hogue: Reilly, please go ahead. Good morning. Good morning, John. I'm just focusing in on some of the, you know, headwinds in 1Q25. Obviously, weather probably shouldn't be a factor, you know, at least in 2Q and 3Q as much. But, you know, things around, for instance, the convention center remodel in Cincinnati or maybe any of the other kind of construction things that were called out. I mean, could those have longer tails? Could that be kind of affecting the rest of the year here? The Convention Center redevelopment in Cincinnati, actually the completion time frame was moved up and as of late they're expecting opening of that in December of this year or January of next year.

Good morning.

Speaker Change: Good morning, John.

Speaker Change: I'm just focusing in on some of the headwinds and <unk> 25.

Speaker Change: And the weather probably shouldn't be a factor you know at least in Q2 and three Q as much but you know as things around for instance, the convention center remodel in Cincinnati or maybe any other kind of construction of things that were called out I mean could those have longer tails could that be kind of affecting the rest of the year here.

Speaker Change: [laughter].

Speaker Change: The Convention center redevelopment and since Cincinnati actually the completion timeframe was moved up and as of late there they're expecting opening of bad in December of this year or January of next year.

Stephanie Hogue: We also had some street closures associated with exterior facade and some apartment building redevelopments which are coming to completion as well.

Speaker Change: We also had some street closures associated with exterior facade.

Speaker Change: And some apartment building Redevelopments, which are are what's you are coming to completion as well.

Stephanie Hogue: Okay. And anything else on the operating expense side in the quarter that was either one-time issue, maybe more permanent? I thought I remember in the press release something around security was kind of called out. Just curious if there's any, how we should kind of think about that OPEX number going forward. Yeah, security definitely has been an expense that we're seeing through the portfolio. There was an element of expense, though, in this quarter that was moved forward, so it was planned R&M for the year that just came up, either timing or it was the right opportunity to do it.

Speaker Change: Okay and anything else on the operating expense side in the quarter that.

Speaker Change: Either one time issue, maybe more permanent I thought I remember in the press release something around security was kind of called out just just curious if there's any how we should kind of think about that.

Speaker Change: Opex number going forward.

Speaker Change: Yeah sicker.

Speaker Change: Security definitely has been an expense that we're seeing through the portfolio. There was an element of expense, though in in this quarter that was moved forward. So it was planned R&M for the year, but just came up either timing or it was the right opportunity to do it. So we expect that that is on <unk>.

Stephanie Hogue: So we expect that that is online with guidance through the year.

Speaker Change: Line with guidance through the year.

John Massocca: Okay. And then, you know, the Renaissance Center in Detroit, splitting it out from RevPass, is that kind of an indication that that asset maybe is potentially going to be a drag? on kind of the overall portfolio, you know, in the near to intermediate term, just given some of the secular things going on with that specific asset, or just kind of curious what the outlook for that specific asset is, just given you split it out from the rest of the... Portfolio. Yeah, you know, Detroit's one of our biggest markets, and that asset is, you know, Premier Riverfront location, but connected directly to the Renaissance Center.

Speaker Change: Okay and then.

Speaker Change: Our Renaissance center in Detroit splitting it out from Rev. Pass is that kind of indication that that bad asset maybe is potentially going to be a drag.

Speaker Change: On kind of the overall portfolio.

Speaker Change: In the near to intermediate term just given some of the secular things going on with that specific asset or just kind of curious what the outlook for that specific asset is just giving you split it out from the rest of the.

Speaker Change: Portfolio.

Speaker Change: Yeah, Detroit, one of our biggest markets and that asset is.

Speaker Change: Premier Riverfront location, but connected directly to the Renaissance Center.

Stephanie Hogue: And so what's happened is that asset has moved from a revenue perspective, it's moved to a trough much more quickly than we anticipated, which is disappointing on one hand, but on the other hand, it says that sort of movement of current tenants in the Renaissance Center is happening more quickly, meaning they're moving out, which should make way for the redevelopment. The downward pressure on our overall performance, once this asset does truly hit the trough, that downward pressure will lessen up, but we wouldn't anticipate any type of real growth there outside of some potential construction worker parking.

Speaker Change: And so what's happened is that asset has moved from a revenue perspective, it's moved to a trough much more quickly than we than we anticipated.

Speaker Change: Which is which is disappointing on one hand, but on the other hand, it says that the sort of movement of current tenants in the Renaissance center is happening more quickly, meaning they're moving out.

Speaker Change: Which should make way for the for the for the redevelopment.

Speaker Change: The downward pressure on our overall performance once this asset does truly hit the trough.

Speaker Change: That downward pressure will will lessen up.

Speaker Change: But we wouldn't anticipate any type of real growth there outside of some potential construction.

Speaker Change: Construction work being construction worker parking.

Stephanie Hogue: Outside of that, we wouldn't anticipate any real growth until the redevelopment is completed there.

Speaker Change: Outside of that we wouldn't anticipate any real growth until.

The redevelopment is completed there.

John Massocca: Is there a rough time frame for when you would expect that asset to kind of trough or maybe or we've already gotten I think we're getting pretty close. And then you called out debt a little bit. You know, looking for maybe alternative sources of kind of debt capital that are more conducive to your operating model. I mean, can you provide a little more color on the conversations you're having today and maybe kind of. a rough timeline for when we might expect something on the refinancing front to that extent. Yeah, you know, John, most of our maturities are 26 and 27, so we're moving a little bit faster from a refinancing perspective than we would otherwise.

Speaker Change: Is there a rough timeframe for when you would expect that asset to kind of draw for me we've already gotten there.

Speaker Change: I think we're getting pretty close.

Speaker Change: Okay, and then you called out that a little bit.

Speaker Change: Looking for maybe alternative sources of debt capital there are more conducive to your operating model I mean can you provide a little more color on the conversations you're having today and maybe kind of.

Speaker Change: A rough timeline for when we might expect some thing on the reef.

Speaker Change: Refinancing flip to that extent.

Speaker Change: Yeah, you know John most of our maturities are 26% 27, so we're moving a little bit faster from a refinancing perspective.

Speaker Change: Then we would otherwise one of the one of the challenges is you can look at our debt.

Stephanie Hogue: One of the challenges, as you look at our debt portfolio, is you have a lot of CMBS portfolios that were done kind of prior to 2020, and they're restrictive in what and when we can sell assets. As you know, the non-core asset piece of our strategy is really important. So, we'll have more to come later this year. We've been working on it, as you know, markets are somewhat volatile. So, working to really find the right answer for the company long-term that allows us to execute quickly on sales as they come, but also, you know, recycle that capital into assets that look more like the core portfolio.

Speaker Change: Portfolio is as you have a lot of C. M. B S portfolios that were done kind of prior to 2020.

Speaker Change: And there are restrictive and what and when we can sell assets as you know the the noncore asset piece of our strategy is really important. So we'll have more to come later this year and we've been working on it is as you know markets are somewhat volatile so working them to really find the right answer.

Speaker Change: Therefore, the company long term that allows us to execute quickly on sales as they come.

Speaker Change: But also you know recycle that capital into assets that look more like the core portfolio or so.

Stephanie Hogue: So, I would say later this year we'll have more but working on it to give us really a lot of flexibility within the portfolio.

Speaker Change: I would say later this year, we'll have more detail, but working on it to give us really a lot of flexibility within the portfolio.

John Massocca: Okay.

John Massocca: That's it for me. Thank you very much. Thanks, John.

Speaker Change: Okay.

Speaker Change: That's it for me thank you very much.

Speaker Change: Thanks, John Thanks, John.

Operator: Again, if you have a question, please press star, then 1.

Speaker Change: Again, if you have a question. Please press Star then one.

Kevin: Your next question comes from Kevin. Barrington Research. Please go ahead. Thanks, good morning.

Speaker Change: Your next question comes from Kevin Steinke with Barrington Research. Please go ahead.

Kevin Steinke: Hey, Thanks, good morning.

Kevin: I just want to start out by asking about the improved contract parking demand trends you're seeing and the increased coverage previous to this point and you know, maybe how sustainable that is. And then you also mentioned initially some pricing sensitivity around monthly commercial parking, although you mentioned that could. is the utilization bill, so maybe just kind of the timeline of how that typically works in terms of maybe when pricing sensitivity lessens in response to higher utilization. Yeah, that's a great question. You know, I would say it's sort of a tale of two stories. Transient, as we're seeing, you know, continued activity in downtown, as well as...

Kevin Steinke: Just wanted to start out by asking about the improved contract parking demand trends you saw.

Kevin Steinke: Seeing.

Kevin Steinke: And.

Kevin Steinke: You know maybe how sustainable that is and then you also mentioned a initially.

Kevin Steinke: Initially some pricing sensitivity.

Kevin Steinke: Uh huh.

Kevin Steinke: Around monthly her commercial parking, although you mentioned that could.

Kevin Steinke: You kind of go away as the utilization build so maybe just kind of the timeline.

Kevin Steinke: Upheld it typically works in terms of.

Kevin Steinke: Maybe when pricing sensitivity lessons in response to higher utilization.

Kevin Steinke: Yeah, that's a that's a great question.

Kevin Steinke: You know I would say, it's sort of a tale of two stories transient.

Kevin Steinke: We're seeing continued activity in downtown so let's see.

Stephanie Hogue: certainly slower than we expected in the first quarter, rates held, so people that are coming downtown for, you know, whether it's dinner events, whyever they're moving around the city, there's not a lot of pricing sensitivity, but you're right, it is absolutely in kind of the return-to-office trend. You know, right now there's a surplus in downtown parking because people have, by and large, not been working Monday through Friday in offices and city cores, so as that trend is shifting, we're getting a lot more inbounds as opposed to just outbounds of us calling, you know, we're seeing our operators are reporting that they're getting more inbounds from people looking for large blocks of parking, as that continues and garages fill up, we will see that pricing power shift towards the company.

Kevin Steinke: Certainly slower than we expected in the first quarter rates held them. So people that are coming downtown for in it whether it's dinner events wherever they're moving around the city theres not a lot of pricing sensitivity, but you're right. It is absolutely in kind of the return to office trend.

Speaker Change: Yeah, right now, there's a surplus and downtown parking because people will have by and large not been working Monday through Friday and offices.

Speaker Change: City horse so as that trend is shifting where we're getting a lot more in balance as opposed to just our bounds of us calling them. You know we're seeing our operators are reporting that they're getting more inbounds from people looking for large blocks of parking.

Speaker Change: If that continues and garages fill up we will see that pricing power shifted towards towards the company.

Stephanie Hogue: Okay, thanks. And then you mentioned some momentum on the ancillary revenue initiatives. specifically calling out revenue sharing for EVs, it sounded like maybe some... revenue generation coming from that later in the year, perhaps. Could you talk about that more and how widespread that is in terms of across your asset portfolio? Absolutely. We have EV in several of our garages, I would say. Performance and utilization takes time to build. Customers need to know that it's there, that it is available. So it's not that you put an EV charger in and automatically it's 100% utilization. We're really focusing on garages that have that residential demand element, because those are people that don't have an alternative place necessarily to charge.

Speaker Change: Okay. Thanks, and then.

Speaker Change: You mentioned.

Speaker Change: Some momentum on the ancillary revenue initiatives.

Speaker Change: Specifically, calling out a revenue sharing for evs it sounds like maybe some.

Speaker Change:

Speaker Change: Revenue generation coming from that later in the year perhaps.

Speaker Change: Could you talk about that more in how how widespread that is in terms of.

Speaker Change: Across your asset portfolio.

Speaker Change: Yeah.

Speaker Change: Absolutely we have easy and.

Speaker Change: Several of our garage is I would say.

Speaker Change: Performance and utilization takes time to build them customers need to know that it's there that it is available. So it's not that you put an EV charger in and automatically it's 100% utilization, we're really focusing on garages that have that residential demand.

Speaker Change: Elements because those are people that don't have an alternative place necessarily to charge they can't drive home and plug it in at their house, So EV charging will become more important.

Stephanie Hogue: They can't drive home and plug it in at their house. So EV charging will become more important. But it is one of those things that just takes probably several quarters before you really have insight in terms of utilization. And that's subject to people knowing it's there, that they're using it consistently, and it's priced accordingly. Okay, understood.

Speaker Change: But it you know it is one of the things that just takes you know probably several quarters before you really have insight in terms of utilization and that's subject to people knowing it's there that they're using it consistently and and it's priced accordingly.

Speaker Change: Okay understood. Thanks for taking my questions.

Stephanie Hogue: Thanks for taking the questions. Thanks for the question.

Speaker Change: Thanks for the questions.

Operator: This concludes our question and answer session and today's conference call. Thank you for attending today's presentation. You may now. 險 h b m mom

Speaker Change: This concludes our question and answer session and today's conference call.

Speaker Change: Thank you for attending today's presentation you may now disconnect.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].