Ricardo Rezende: Good afternoon, good morning, everyone. Thanks so much for joining the Parkin Q3 earnings call. My name is Ricardo Rezende. I lead the coverage for transportation infrastructure in the Middle East and Eastern Europe at Morgan Stanley. It is a pleasure to have Parkin's management with us today. From the company side, we do have Mohamed Al Ali, the CEO, Osama Alsafi, COO, Khattab Abu Qaoud, CFO, Naveed Khawaja, the Director of Strategy, and also Max Zaltsman, the Head of IR. We are going to take questions after the company's presentation. If you want to ask any questions, please do click on the raise your hand button that you can see. Otherwise, if you rather send any written questions, please do email me at ricardo.rezende@morganstanley.com. You can also reach out to me on Bloomberg and IB me your questions, and I can ask those questions live.
Ricardo Rezende: Without further ado, I will pass it over to Max.
Max Zaltsman: Thank you, Ricardo. Hello, and good morning and good afternoon. This is Max, and I look after the Investor Relations side of things at Parkin Company. We would like to extend our thanks to Ricardo and the team at Morgan Stanley for hosting today's call for us. The itinerary is that we shall take you through our Q3 operational and financial results, followed by some Q&A. Before we begin, please read through the usual disclaimer, which contains important information around the interpretation and limitations of historical data and forward-looking statements. I will now hand over to our CEO, Mohamed Al Ali, for his opening remarks.
Mohamed Al Ali: Thank you, Max. Good morning and good afternoon, ladies and gentlemen. It is my pleasure to welcome you to our 11th quarterly results call since Parkin became a listed company. This quarter, we delivered our strongest financial performance to date, which with the record income, EBITDA, and net profit, supported by our best-in-class operations, technology, and enforcement capabilities. Our key operational highlights for the quarter are as follows. We ended September with a record of 272.5 thousand parking spaces, up 24% year on year, driven mainly by our developer portfolio, which has almost tripled to 63,000 spaces. Parkin transactions volume across our network were up 6% to 36 million, with every month of the quarter ahead of the same month last year.
Mohamed Al Ali: Public parking utilization was lower year on year at 19%, with the demand continuing to migrate to the seasonal cards, the sales of which reached a record 110,000, up 37% compared to Q3 2025. On the enforcement side, our field inspector and our fleet of 37 smart scanning vehicles supported compliance across the enlarged parking network. Together, this operational achievement supported our strong financial performance. The result is record quarterly income of AED 415 million, up 21%, a record EBITDA of AED 255 million, up around 28%, and record net profit of AED 199 million, up around 27%. Looking ahead, we remain confident in the long-term strength of our business and our ability to manage the current operating achievements. Our COO, Osama Alsafi, will now take you through our Q3 operational performance.
Osama Alsafi: Thank you, Mohamed, and good day, everyone. My name is Osama Alsafi. I am Parkin's Chief Operating Officer, and I will be taking you through the key operational highlights of the third quarter. Let me begin with a few high-level observations. Despite the seasonally softer summer months, core business activity remained resilient, with total transaction volume increasing year on year in each month of Q3 2026. September was the strongest month of the quarter, with transaction volume of 12.4 million, supported by stronger developer parking demand. Public parking utilization dipped to 18.6% in August, the usual summer low before recovering to 19.6% in summer. Over the last 12 months, we added around 13.7 thousand public parking spaces, which has a modest deleterious effect on utilization, while these new locations ramp up occupancy levels. Seasonal cards are a good way to gauge resilient residential demand.
Osama Alsafi: Monthly card sales increased in every month of the quarter, from 35.8 thousand in July to 37.2 thousand in August, and a record 37.6 thousand in summer. With regard to enforcement activity, September was the highest month of the quarter, with 335,000 fines issued, which includes the processing of some fines captured in prior periods. Overall, the quarter highlighted the strength and resilience of the underlying business, and we have seen encouraging traffic trends in September and October. Let us move to the next slide, which details the expansion of our public parking portfolio and its utilization rates. In terms of portfolio expansion, we added around 13,700 new public spaces over the last 12 months, around 9,300 in Zone C and around 4,300 in Zone D. In the first nine months of 2026, we added 12,600 new public spaces.
Osama Alsafi: On the right-hand side of the slide, you can see the public parking utilization rate. Following the introduction of the variable tariff last year, customer demand has contributed to a shift towards seasonal cards, particularly among customers who would otherwise be paying on an hourly or daily basis. This seasonal card demand is not captured in the utilization rate you see here, with card sales reported as a separate revenue stream. I will now discuss transaction volumes and enforcement. Public parking transaction volumes came in at 28.8 million, down 4%, as customers continued to take up seasonal cards, which remain priced at pre-variable tariff levels. Although public parking transaction volumes were 4% lower, developer transaction volumes increased by 79% year on year to 7 million, reflecting the successful onboarding of new contracts and the expansion of our developer portfolio.
Osama Alsafi: In terms of enforcement, 916,000 fines were issued in Q3 2026, up 34% compared with Q3 2025. Enforcement growth was driven by the expansion of the overall portfolio, particularly developer parking, where fines more than doubled. The fine collection rate normalized, recovering to 87% from 75% in Q2, as collections related to fines issued toward the end of June were received. Let's now look at seasonal cards. We offer two categories of seasonal cards, a card covering all public parking zones, which are A, B, C, D, and the card which covers just off-street parking, which is zones B and D. Each type of seasonal card can be purchased for a period of either one month, three months, six months, or even 12 months. In Q3 2026, we sold a record of 110,600 seasonal cards, a 37% increase compared to Q3 last year.
Osama Alsafi: The strong demand reflects the value they offer customers since their price remains unchanged for the moment. Consistent with previous quarters, one-month cards remain the most popular product, with sales up 34% to 91,800 cards. Sales of longer duration cards also grew, with demand of the 12-month card increasing 4% to 5,600 units. That's all from me on operation. Over to Khattab for the financials. Khattab.
Khattab Abu Qaoud: Thank you, Osama. Starting with a breakdown of income by segment, total Q3 income grew 21% year on year to a record AED 415 million, with growth across developer parking, seasonal cards, enforcement, and other services. It also includes AED 15 million in parking reservations. Public parking revenue was AED 128 million compared to AED 135 million in Q3 2025, with pricing stable at an average of AED 2.99 per hour. This reflects the continued shift of regular parkers from hourly payments to seasonal cards, which are captured in a separate revenue line. Taken together, public parking and public seasonal card revenue grew 4% year on year to AED 203 million. We also added 13.7 thousand parking spaces over the past year, and as these new locations mature, we expect them to make a growing contribution to revenue.
Khattab Abu Qaoud: Developer parking revenues increased 69% to AED 40 million, driven by higher transaction volumes following the addition of new contracts over the last 12 months. Seasonal cards and permits grew 40% to AED 84 million, with Osama having covered the operational drivers behind this. Enforcement revenue rose 32% to AED 136 million, reflecting portfolio growth, particularly in developer parking, and the recovery in the collection rate to 87%. Operating expenses increased by 12% to AED 160 million in Q3 2026, compared to AED 144 million in Q3 2025, reflecting the continued expansion of the business. Most of the increase came from higher developer lease expenses, with higher maintenance, other costs, and telco commissions. At AED 68 million for the quarter, the concession fee was lower than the AED 61 million in Q3 2025, as the prior year quarter included a one-off provision of AED 4.4 million relating to Q2 2025.
Khattab Abu Qaoud: Excluding this, the fee actually increased by 2%, primarily due to higher seasonal card revenue. Staff costs were stable at AED 35 million, based on a headcount of 360 employees, reflecting tight cost controls, with hiring focused mainly on critical roles. Commission expense grew by 18% to around AED 13 million, reflecting higher transaction volumes through telco and various other payment channels that Parkin offers its customers. Developer lease expense more than doubled from AED 10 million to AED 22 million, reflecting new developer contracts and higher transaction volumes. Other costs, which include things like professional fees and TSA costs, totaled at AED 22 million, remaining well controlled relative to the double-digit revenue growth delivered in the period. I will now take you through the EBITDA builder. This slide shows the contribution of each revenue stream and cost category to Q3 EBITDA of AED 255 million.
Khattab Abu Qaoud: On the revenue side, enforcement, seasonal cards, and developer parking were the largest contributors to growth, more than offsetting softer public parking revenue. On the cost side, the concession fee remained the largest expense at AED 58 million, followed by other operating costs at AED 55 million, which include developer lease expense of AED 22 million and employee costs of AED 35 million. Commission expense added another AED 13 million. The waterfall illustrates the operating leverage in our business model. Broad-based revenue growth more than offset the increase in operating costs, enabling us to deliver EBITDA growth of 28% and margin expansion to 61%. Now, on to profitability. Q3 EBITDA increased by 28% year on year to a record AED 255 million, with the margin expanding by 3 percentage points to 61%. The margin was supported by growth in developer parking and enforcement, neither of which is subject to the concession fee.
Khattab Abu Qaoud: Net profit increased by 27% year on year to a record AED 199 million, driven by higher revenues and marginally lower finance costs, partly offset by increased operating expenses, higher depreciation charges, and larger taxes. CapEx in the quarter was AED 28 million, in line with our full-year guidance of AED 45 to 55 million, as we invest in developer contract obligations and smart parking infrastructure. As a result, cash conversion was 89% in the quarter. Let me take you through how we arrived to our free cash flow to equity figure. Free cash flow to equity for the first nine months was AED 421.5 million. Net cash from operating activities was AED 500 million, and net cash from investing activities was AED 192 million, while financing activities used AED 397 million, giving a total cash inflow of AED 295 million. Then we make two adjustments.
Khattab Abu Qaoud: We adjust AED 218 million relating to movement in bond deposits, which moves money into cash, then we add back AED 344 million of dividends paid for H2 of last year. That brings our closing free cash flow to equity for the period to AED 421 million for the first 9 months. Free cash flow to equity remained broadly stable year-on-year, decreasing by just 3%. This reflects the continued growth of enforcement revenues, which are collected over a longer cycle, together with the timing of collection from telecom operators, which are typically received towards quarter end. To close things off, Max will now say a couple of words on full-year outlook.
Max Zaltsman: Thank you, Khattab. So, as you've heard from Mohamed, Osama, and Khattab, Parkin delivered a reasonably strong Q3 performance and remains well-positioned to navigate the current operating environment, supported by the structural strength of our diversified business model. The net result of all this is a modest upward revision to our guidance for both seasonal cards and permits, as well as enforcement activity. Seasonal card and permit revenue guidance is raised to AED 300 million, so between AED 300 and 320 million, up from AED 280 to 300, while enforcement is up to between AED 460 and 480, up from AED 420 to 460. So at the midpoint, both are around 6% to 7% higher. Developer parking guidance remains unchanged at AED 130 to 150 million for this year, while public parking revenue is expected to land closer to the midpoint of the original AED 510 to 550 guided range.
Max Zaltsman: CapEx guidance is also unchanged at AED 45 to 55 million. And with that, Ricardo, can you please help us take some of the questions?
Ricardo Rezende: Of course, and thanks, Max. Just to remind everybody, if you want to ask any questions, please do click on the raise hand button, or otherwise, you can email me at ricardo.rezende@morganstanley.com, or you can also message me on Bloomberg. Daniel, before we go to the live questions, if I may get a couple of questions on my own, just to kick off. First one, you mentioned during the presentation about October trends being quite good. If you could provide us a bit more color on how the Q4 has been doing so far, and if you compare October with September, what sort of traffic or parking trends that have been seen. Then the second question as well, and sorry, in that chart, if you could, there's enough data to talk a little bit about November as well.
Ricardo Rezende: And then the second question would be on the utilization rates. As you pointed out during the presentation, the utilization rate is only based on the paid parking on the public spots, not capturing the seasonal tickets. If we do assume and do some adjustments, including the seasonal tickets as part of that, do you see different trends on utilization rates compared to what you see on the headline numbers? Thank you.
Max Zaltsman: Hi, Ricardo. So, in terms of traffic, as I am sure you guys all know, and I think, you know, you guys and various other sell sides and buy side look at this, you have got the TomTom Traffic Index, and you can see there that September and October, whether it is peak or off-peak, are higher than the long-term average. So I think October is equally strong, and you can see it in the traffic whenever sort of we commute to and from the office, the traffic is quite heavy. In terms of your other question, seasonal cards and permits, we have actually run a number of analysis internally. The first analysis which we ran is as follows. If you plot, you can do this sort of on a monthly basis or quarter by quarter.
Max Zaltsman: If you plot the public parking utilization as one line, and then you plot the number of seasonal cards that are active, so total active cards, the lines more or less diverge. So whenever you have, for example, a decrease in utilization, there is more or less a corresponding increase in the volume of active cards. And broadly speaking, when sort of Khattab and I looked at this a couple of weeks ago, in terms of numbers, we noticed that if you add the revenue from seasonal cards on top of the revenue from public parking, and you work that out as a percentage of the maximum theoretical revenue, it is more or less roughly stable from Q2 2025 up until now, because Q2 2025 is when we introduced the variable pricing. It is at roughly 30%. I think the deviation is roughly sort of 50, 60 bps either way.
Max Zaltsman: But utilization, it seems to be more or less consistent when you add back the seasonal cards, which I guess makes sense in terms of what we have been saying all along. Whenever somebody buys a seasonal card, you are not losing the revenue utilization. It is simply flowing from one business segment to another. I think what we will probably do for next time is we will put a slide in this together for you guys to understand.
Khattab Abu Qaoud: Yes. Also, it is very important maybe to which also adds another point that the utilization rate is also a bit diluted when it comes to expansion, right? Because you are not comparing apples to apples, you are comparing added spaces to the older spaces. However, the lesson learned here is that the criteria used for paid parking shows that it is effective in terms of where it should be paid, if that makes sense. Because we have a certain criteria that is between us and the RTA and how you should convert unpaid parking to paid parking. And we can tell that from the utilization rates that are stable or that don't move much, which proves that the criteria being used is also having this positive effect on public parking.
Ricardo Rezende: That is very clear, Khattab. Thank you. Daniel, can we open for the live questions?
Operator: Hi. Sure, Ricardo. Our first question comes from Jamil Bash. If you could unmute your line and ask your question.
Jameel Bakhsh: Hi, everyone. Hope you can hear me. Hello?
Max Zaltsman: Yes. Hi, Jamil. Go ahead.
Jameel Bakhsh: Perfect. Hi, everyone. Jamil Bash from Bank of America. Two questions from me. Firstly, just on the trends in Q4 so far, and then related to the guidance. If we are seeing that October is kind of showing the same level of strength as September, I noticed a few of your revised guidance items imply a slowdown in Q4. For example, in enforcement revenues. I just wonder if you could comment about the actual likelihood on that, or is there just a degree of conservatism in the guidance? Then I can ask my second question after.
Max Zaltsman: Well, I do not think there is a degree of conservatism, which is why we have increased the guidance overall for both seasonal cards and permits and for enforcement. What we will say is that if you look at page 8 of our announcements, you will see that the total number of fines issued in September was a little bit higher than the average. Khattab, maybe you want to talk about that one. What we are saying is that the fines in September were a little bit higher because during that month, we processed some fines from prior periods. For example, July 2026, 205,000 fines were issued. August was again, I would say peak summer, so slice that down to 276, and you got a big step up September in 335. I would say roughly 10% of that 335 was in relation to earlier periods.
Max Zaltsman: But as far as we are concerned, as far as management is concerned, we think the new guidance of AED 460 million to AED 480 million accurately captures the possibility of the enforcement segment for the full year.
Jameel Bakhsh: Okay, perfect. That is super clear. Thank you very much. Secondly, just on looking forward into the new year. I understand that there is going to be the tender for management of the parking spaces at the airport. Could you share some details how many spaces will this cover? When you look at an agreement like the airport, are you looking at profitability along the lines of your developer portfolio?
Naveed Khawaja: Hi. Good afternoon. This is Naveed, the Director for Strategy here at Parkin. For the airport, as we are already aware, they have floated the RFP. The submission is towards the beginning of January 2027. We are already working on developing the submission along with partners. It is quite a wide scope which needs to be submitted. It is not just parking operations, but other ancillary matters as well. The quantum of parking spaces as of now stands at approximately 10,000, but obviously those could change based on our site visits and so on.
Khattab Abu Qaoud: In terms of profitability, we look at it from, again, this is a very competitive bid. Dubai Airport also is a very important airport, so we have multiple bidders, local and international, and it is quite an aggressive bid. However, for us, the main focus is that everything needs to be EPS accretive.
Jameel Bakhsh: Sure thing. Thank you very much. Does this also cover Al Maktoum as well as DXB?
Naveed Khawaja: Yes.
Khattab Abu Qaoud: Yes.
Naveed Khawaja: Yes, it does cover.
Jameel Bakhsh: Okay, fantastic. Thank you very much. Really appreciate the color. Thanks, Jamil.
Operator: Our next question comes from Ankur Agarwal. If you could unmute your line and ask your question.
[Analyst 1]: Yeah. Thank you for the presentation. Couple of questions from my end. The first question is around the sustainability of this enforcement revenue. I know that you've done a lot in terms of number of scan cars, inspectors. How should we think about the trajectory of the enforcement revenue going forward? It has done exceedingly well so far. I think, on the seasonal pass, obviously, there is a plan to increase the prices, which will bring the volume down. I think the sum total of public parking seasonal pass may remain the same. Is there any plan to increase the fines as well, if and when the volumes goes down?
Mohamed Al Ali: Thank you for your question. This is Mohamed Al Ali, I am the CEO. First of all, our main direction is to increase the compliance. It is not our aim to increase the fines. Also, we are continuing and investing in the technology. By the time it is coming now, we are almost all the multi-story car parks, it is like fully seamless, where you have auto deduction from your wallet, followed by the off-street parking. Also, we deployed the cameras in the off-street parking, which shows the efficiency, and also increase the number of our inspection cars. However, there is always potential to increase our portfolio, increase the new projects. Dubai always has new visitors and new users. Still, people, they are not renewing their tickets.
Mohamed Al Ali: Do not forget that the enforcement not only on the payments, and you are not paying or expiry of your tickets. We have another 10 categories of the enforcement, including the activity, the business, and the public parking itself. That is one. Also, we implement now almost in the POD parking, which is the enforcement for that is like 1,000, almost deployed everywhere in Dubai, including the price of the malls. That is also hitting the direction a little bit high. Yes, our intention is to keep people more compliant with the payments by providing auto-renewal and auto-payments from using our application and wallet. You know that the strategy in Dubai, you have fully transport ecosystem. It is integrated between the public transport and the mood of with the solutions in order to enhance the traffic around Dubai.
Mohamed Al Ali: That is actually how we are working and how we direct.
[Analyst 1]: Okay.
Khattab Abu Qaoud: If I can add. In terms of sustainability, we do expect that as you have seen, it has been 11 quarters. Fine revenues have been increasing. The expectation is that as a percent of revenue, it should stabilize within that figure, let us say 30%, at least in the short to medium term. Also, it goes in line with the expansion, as we expand into new places, into new territories. Our expansion for the past couple of years has been quite aggressive, and that has a very positive impact on enforcement revenue. That is like the direction that we believe that will stay very sustainable and solid revenue stream. Now, toward the question of increasing the fine tickets. For now, there is no intention because it is quite. The charge is already deterrent.
Khattab Abu Qaoud: So, if the parking ticket or the fine becomes not deterrent enough, then it is subject to revision with the RTA and the Executive Council. I think the other question was regarding the seasonal cards, correct? Again, we are definitely in talks with RTA. We are moving, continuously following up in terms of when this will be raised to the Executive Council. From an RTA perspective, they do believe there is a parity that needs to be adjusted, and it is approved tentatively by the RTA. We are just waiting to raise it to the Executive Council. I think the main idea to look at is how the geopolitical position is moving forward. Of course, we pray that things stay positive and this momentum keeps on going into the right direction, which will also give better support to adjusting the price of the seasonal cards from an Executive Council perspective.
Khattab Abu Qaoud: As we get an update, of course, we will update the market accordingly.
[Analyst 1]: All right. If I may ask one, two more questions. There is a question on, have you seen a shift from, let's say, the RTA app to the Parkin app, which is significant enough? Also from the SMSs to the Parkin app, for example. Have you basically renegotiated the terms with the telecom operators in terms of what you pay to them?
Mohamed Al Ali: Yes, actually, till date, we have around 2.6 million registered cards on our application. This is coming almost within a year's time. So, we are seeing, yes, and certain action has been also taken. I mean, solutions communicated. Official letters with the telco companies here, and we are negotiating with them. The idea is here to divert the people using the application towards the SMS by actually keeping all the expenses to be borne by the customers, so they will be like their own choice. So yes, we have seen, lately, the numbers have been increasing gradually, honestly.
Naveed Khawaja: The shift has been there even in terms of the app because, you know, our app offers. From the RTA app, you can just book your ticket, but from our app, there are the other plethora of services which are available with Parkin. Therefore, the shift has been significant from the RTA to the Parkin app. In terms of the telcos, we are in the process of negotiating.
Mohamed Al Ali: There is also one action after we realized that there is certain unofficial apps, you know, operated by privates, you know, we can say individuals, you know, people here in the UAE or even in Sudan. We already start, you know, communicate with them to cancel and remove our services from that to minimize the printing on the SMS.
[Analyst 1]: Okay. What is the margin or working capital implication of this shift from SMS to your app or RTA app, RTA to your app?
Mohamed Al Ali: RTA to our app, it is the same. There is no. Because for us, it is the same payment provider. But from shifting from SMS towards our app, there is, like, you can say a 5% saving. Not 5%. I mean, actually, we cannot say. This is not something we can disclose. We will give the figures once we get into a clear direction.
Max Zaltsman: And so just in terms of numbers, just round numbers here.
[Analyst 1]: Okay.
Max Zaltsman: Approximately 50% of all transactions still go through SMS, so there is some upside we could capture there.
Mohamed Al Ali: Yeah.
Max Zaltsman: And I think commission expense is around sort of like 11, 12 million a quarter. So, yeah, I think we can make inroads into that, and that is our intention. So, as Mohamed said, we have sent a letter to the telcos, and we are negotiating various options and terms with them. Obviously, once we know something, we will communicate that to the market. No updates yet.
Mohamed Al Ali: I mean, we are encouraging people to use the application more, actually, and we have a lot of services there, so we keep everything utilized in the app itself. So that people honestly gradually using the application. We have seen that. We realized that. Do not forget that actually we are expanding now more and more. We have different accounts, like individual, business, and family accounts. This is actually direct lot of, especially with the big business people. We had a meeting last week with the RTA. Now all the rental cars actually, companies, this will be embedded in there, and the other cars will be also deduction directly from the wallet. So, I mean, we have around 3,600 companies. They register around more than 153, 155,000 car registers. So this is also should be increasing gradually as well. So a lot of initiatives that is coming towards the application.
Mohamed Al Ali: I've seen like 2.6 million within a year. It's not a joke now. That's the registration of the car. A lot of reports coming, and more and more is coming, Mashallah, towards adding values as well. You know, like, to come now shortly, the EV charging, car washing, light maintenance, car registration, everything that will be there on that platform. This is for sure it will enhance the utilization and people, you know, dependency on the application if it's possible.
Naveed Khawaja: Yeah. As of total transactions, they range between 16% to 20% compared to last year, same quarter, it was around 5%. That tells you there has been a significant increase in terms of the transactions on the digital channels.
[Analyst 1]: All right. This is very helpful. Thanks a lot, management team. Thank you.
Mohamed Al Ali: Thank you.
Max Zaltsman: Thank you.
Operator: Our next question comes from Nishit Lakhotia. Unmute your line and ask your question.
Nishit Lakhotia: Hi. Nishit Lakhotia from SICO. I have a couple of questions. First, coming back to your enforcement revenue. You said in the long term it could be around 30% because you believe there should be more compliance. That is perhaps more the objective as well. But enforcement revenue is where most of your operating income or the earnings boost also comes because this more or less goes to your bottom line. So I am trying to understand, if it is currently around 44%, it increased from 38% to 44% in the nine months this year. If this goes towards 30%, how does your margin profile eventually play out? Would that be something of a concern to you? That is my first question. Second, on the TomTom data, can we
Max Zaltsman: Why do not we just take one at a time? That is probably going to be easier. Let us take one at a time.
Nishit Lakhotia: Okay. Sure.
Mohamed Al Ali: For the first question, it is not 38% or 40%. We are talking about, we are comparing enforcement revenue to total revenue. It has been growing since we carved out. It has been growing from 25% to 26%, then it hit 30%, even though the top line is also growing at a double digit. Our expectation when we first guided during the IPO, it was supposed to, the revenue as an absolute figure would increase from enforcement. However, as a percent of total revenue, it was expected to stabilize at 25% or 26%. However, after this, you know, after 11 quarters of, Alhamdulillah, I mean, increasing our revenues, the enforcement revenue has been increasing. Then we expect that to stabilize at 30% compared to total revenue. Because it is hovering between 30%, 31%.
Mohamed Al Ali: As compliance increases, the top line would marginally improve, which would then have the stabilizing the revenue percent of enforcement to be at 30%. However, as an absolute figure, it would keep on growing.
Naveed Khawaja: As we expand, as more portfolio comes in, enforcement comes along with it, so yeah.
Osama Alsafi: I can add that recently we have added the pure service of enforcements in some development areas, which is managed by themselves by providing the enforcement service.
Naveed Khawaja: This also.
Osama Alsafi: Yes, those are the illegal performance. It is a Parkin support service for enforcement only.
Nishit Lakhotia: Okay. Thanks. That is clear. 30% is something that you expect can be sustained. It will not fall below that from 30% to 33% currently. That is fine. The other question I had was on the TomTom data, because we are comparing it with long-term average. We are trying to look at September and October. Can you share some data on how is it versus last year, just to get a sense of how the normalization is happening? Only versus 2025, September, October. How is it now, September, October, not the long-term average?
Max Zaltsman: Yes, sir. Are you talking about the traffic data?
Nishit Lakhotia: Yes.
Max Zaltsman: Well, not we, but Alex from UBS and I think Morgan Stanley and Bank of America, a couple others, they brought this index to our attention. I think people only really started looking at this from the beginning of March. I am not aware that anybody has been tracking this prior to that. The point that this chart makes is that both off-peak and peak traffic is higher than the long-term average. Whenever you speak to someone about this, TomTom obviously want you to buy the data, but they do not tell you exactly what you are comparing it to. We know that this is not a comparison from, for example, October 2026 versus 2025. This is a comparison over a longer period, which could be, say, three to five years.
Max Zaltsman: So, those numbers you see there, they are up versus the long-term average, which could go back to, say, 2021, for example. It could be going back as far as 2021, which makes sense because Dubai has now hit just over 4.8 million residents. This is more or less double the amounts it was a decade ago. So, the various things that you can tie together, higher residents, more traffic, they sort of go hand in hand with each other.
Nishit Lakhotia: True. I mean, given the growth in Dubai's traffic over the last three to four years, I do not know what the average is, but the average will always be lower than comparing it with last year. So, we would not get a sense of how the normalization is based on this data, this last two months versus last year.
Max Zaltsman: Well, look, I mean, I know that my journey doesn't account for everybody else's journey, but I always use Waze to travel to and from work. I always take, unless there's an accident, I take the same roads. In March, my route to work was exactly 20 minutes because the government advised that if you don't have to be at work and you can work from home, you should be doing so. Prior to that, it was around 30 minutes, and I'm back up to 30 minutes again, sometimes 31 minutes. As far as I'm personally concerned, traffic is back to normal.
Khattab Abu Qaoud: It's not increased. Yeah. If you notice, yeah. For those who are living in Dubai, maybe also it's very important to highlight that this year, actually, the RTA has opened a lot of new roads, a lot, which should have actually, in that technicality, your traffic time should lower. But in fact, it's either stayed the same or it became longer. My personal experience is yes, it's getting longer at some point, and the roads are busy across the day, which means that traffic has picked up significantly, and it could be higher than last year's average. Also, the population is at an all-time high, which means that traffic, which would also translate into increased traffic. That makes sense.
Nishit Lakhotia: Okay. Thank you so much, and all the best.
Operator: Our next question comes from Alex Estefanos. If you unmute your line and ask your question.
Alex Estefanous: Good afternoon, guys. Congrats on the results. I promise I will keep it just the two questions. The first one is, we will start with the first one. Developer parking places have nearly tripled. Developer fines have doubled as well, if that is the right stat to use, or just enforcement has gone up. Is there a direct correlation between the growth of developer portfolio and enforcement revenues, and how should we assume fines per space as the portfolio continues to expand and evolve? That is the first one.
Khattab Abu Qaoud: Oh, Matt. Hi, Alex. How are you?
Alex Estefanous: I am good, thank you. Sorry for the tough question. I just wanted, even if it is anecdotal, just what is the sort of compliance rate amongst developer parking versus public? Is there a discrepancy?
Khattab Abu Qaoud: There is no discrepancy, but usually these developer parking areas are more matured than the rest of the public parking portfolio because the public parking portfolio is extremely big compared to the developer parking portfolio, correct? Over 200,000 spaces are public parking, and some areas would have lower utilization because of the nature of the area, right? Sometimes it is busy in the morning, sometimes it is busy in the evening, and rarely, or even if it is busy across the day, it will not be across the 200,000 spaces. Whereas in most developer parking areas, due to the given commercial element in that area, which is a mixed-use area, you would have higher utilization in those areas, and these areas were not paid before, and then we are introducing our services.
Khattab Abu Qaoud: For the first period, you notice that there is an increased activity in enforcement, and that is why maybe you saw it was double compared to the rest. However, we look at it from a totality perspective. The percent of fines to revenues is roughly between, let us say, 29% to 33%. That is how you want to look at it. The growth element we are looking at is probably 1%, 2%.
Alex Estefanous: Perfect. Thank you very much. The second question, again, it is on utilization. How are you thinking about the outlook for public parking utilization? Obviously, the impact of seasonal permits and as capacity normalizes, could we see utilization move back into the sort of low 20s range?
Khattab Abu Qaoud: More or less. Again, it is very important to highlight the following. The utilization rate is diluted by the expansion in spaces. The more spaces you add, because, let us say, if I add the space in September, the theoretical calculation is for the whole quarter. So you have 2 months dilution, and this will always remain. Now, it is probably maybe early to test if people will move, because also as you expand, it might be even more convenient for you to be going for a seasonal card. We do not expect drop in seasonal cards. We do expect maybe a better shift towards public parking, like tickets by the hour. Again, when you expand more, then it might be easier for you to opt for a seasonal card.
Alex Estefanous: Understood. Thank you very much, Khattab. All the best.
Khattab Abu Qaoud: Yeah. The way we are going to probably make this better illustrated, we are going to, by next call, be providing the utilization rate from seasonal cards, PODs, and senior citizens, just to give a total outlook on what is the actual utilization that we are getting in our spaces.
Alex Estefanous: Thank you. Clear.
Operator: Our next question comes from Wayne Brown. If you unmute your line and ask your question.
[Analyst 2]: Good morning, everyone. Hi. Thanks for your time today. If these questions have been answered, I apologize. Just three quick ones from me. If customers are switching from hourly parking to the subscriptions and to the seasonal, how are you thinking about higher prices for next year, or the price elasticity for next year?
Khattab Abu Qaoud: Well, we tried to ask for something between 30% to 60% uplift to maintain the same discount that has been given before the introduction of dynamic pricing.
[Analyst 2]: Okay. Thanks. Profits are growing faster than cash flow. Could you just walk me through those reconciling lines?
Khattab Abu Qaoud: Can you repeat that? There was a disconnect. Josh, can you repeat that? The guy disconnected.
[Analyst 2]: Yeah. I was saying profits are growing faster than-
Khattab Abu Qaoud: Repeat it.
[Analyst 2]: I was saying profits are growing faster than cash flow, and I was just asking if you could help with what is causing that growth and then that.
Mohamed Al Ali: Sorry, your voice is.
Max Zaltsman: The line is breaking up.
Mohamed Al Ali: Yeah, breaking. Cannot hear you clearly. If you can send it via message, please.
[Analyst 2]: I will send an email. Sorry. Thank you.
Mohamed Al Ali: Go ahead again now, maybe. It is fine.
[Analyst 2]: Sorry about that. I was just asking what the difference between profits and cash flow, and when the cash is going to come through, and what the reconciling items are.
Max Zaltsman: I think email is probably the best bet. Sorry, Wayne.
[Analyst 2]: No, sorry. I will send you an email. We can chat later. Sorry.
Khattab Abu Qaoud: Perfect. Thank you.
Operator: Our next question comes from Shahrukh Nawaz. If you unmute your line and ask your question.
Shahrukh Nawaz: Hi, am I audible?
Khattab Abu Qaoud: Yes.
Shahrukh Nawaz: Thank you for the presentation. This is Shahrukh Nawaz from FAB Bank. I have two questions. First is, looking at your guidance of adding 1,000 to 2,000 public parking spaces in Q4, can you highlight till now how much spaces have been added? During Q4, it will be in which specific zones out of the four zones? The second question is there any plans of entering Northern Emirates in 2027? That is all.
Khattab Abu Qaoud: Yeah. As of today, what we have disclosed, we have added 13.7. The guidance was roughly 10. We have managed to do that by H1. We added another 3.7 by Q3, and that is why the guidance is that we are moving from a total portfolio reaching roughly 15,000 spaces, so that is the remaining balance. In terms of entering other Emirates, yes, we are working with other Emirates. Maybe for now, we already are operating in Sharjah and Abu Dhabi. Maybe Naveed wants to add a few.
Naveed Khawaja: Yeah. Just the same aspect that we are already operating in Sharjah through private developer, and we are in talks with the other Emirates in order to see how we can enter both in terms of either private or public parking.
Shahrukh Nawaz: In terms of the spaces, it will be mostly into which zones, the guided range for Q4?
Max Zaltsman: Well, usually the spaces are added in Zones C, being on-street, and D, being off-street. Typically, that is in the public parking portfolio. A and C is on-street, B and D is off-street. The additions will be mostly in C and D, as they always are.
Shahrukh Nawaz: Okay, thank you.
Max Zaltsman: Ricardo, I am conscious that the Dubai Taxi Company call starts in about 5 minutes, and I promised Nada that I would not hold people up. Do you want to maybe take one more, and then people who need to disappear can disappear?
Ricardo Rezende: Daniel, do we still have a final question?
Operator: Yeah, we have got one final question from Abdul Rafay. If you unmute your line and ask your question.
Max Zaltsman: Hello.
Abdul Rafay: You wait in.
Khattab Abu Qaoud: Yes, hello.
Abdul Rafay: Hi, Rick. So, on the developer parkings, we have added, we have tripled our parking spaces in the last year. So, what is the growth that you are expecting in developer parking spaces in the next year, 2027?
Khattab Abu Qaoud: For the guidance, you will have to wait for next year's guidance, which is going to be after Q4 results.
Max Zaltsman: Yeah. It is going to be in February. I mean, just overall, I think during the RTA process, I thought there was roughly, what, 1,000 spaces every year?
Abdul Rafay: Yeah.
Max Zaltsman: You obviously would have seen that there has been a major step change. Some quarters, we have added lots of space. Other quarters, it has not been a lot of space. Developer parking, it is competitive. We do have a number of advantages, but it is not something that we can easily forecast, compared to, say, public parking, because that focuses or that is centered around the RTA's five-year plan, which is the medium-term plan. Obviously, they update the management team on a quarterly basis as well. So, developer parking, it is just much more difficult to forecast because it is one of those you eat what you kill scenarios. Yeah. We will update in relation to that in February 2027.
Abdul Rafay: Okay. Thank you.
Max Zaltsman: If anybody has questions, because as I said, I know that DTC have their call coming up, my email is on screen there. Feel free to reach out to me, and we will do our best to get back to you ASAP. All right? A big thanks to Ricardo once again for having us on the call and for the investors who joined us. I think that is it.
Khattab Abu Qaoud: Thank you all.
Abdul Rafay: Thank you.
Khattab Abu Qaoud: Thank you.
