Via Transportation, Inc. (VIA) Earnings Call Transcript

Hello, everyone. Thank you for joining us, and welcome to the Via Q3 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to the Via team. [Presentation]

Good morning, and welcome, everyone, to Via's third quarter 2026 earnings call. I'm Gabby McCaig, Via's Chief Corporate Communications Officer. With me today are Daniel Ramot, Via's Co-Founder and CEO, and Clara Fain, Via's Chief Financial Officer. During today's call, Daniel will review our third quarter 2026 business update before handing it off to Clara to discuss financial results and our guidance for the rest of the year. We will then open the call to Q&A. In addition to prepared remarks on this call, additional information can be found in our investor presentation, press release and SEC filings on our Investor Relations website at investors.ridewithvia.com. Before we get started today, we want to draw your attention to the safe harbor statement included in our press release and investor presentation. Items we discuss today will include forward-looking statements and topics, including, but not limited to, our future financial performance, projections and management's plans and objectives for future operations. Actual results may differ materially from those presented in the forward-looking statements and are subject to risks and uncertainties described more fully in our SEC filings, including our quarterly report on Form 10-Q. Any forward-looking statements that we make on this call are based on our assumptions as of today, November 9, 2026. Unless required by law, we undertake no obligation to update or revise these statements as a result of new information or future events. We would also like to point out that our discussion today will include certain non-GAAP financial measures in addition to, not as a substitute for financial measures calculated in accordance with generally accepted accounting principles. Definitions of these non-GAAP financial measures, along with reconciliations of non-GAAP to GAAP financial measures are provided in our press release and our investor presentation. And now I'll hand it over to Daniel.

Thanks, Gabby, and thank you, everyone, for joining us today. We're thrilled to report another exceptional quarter for Via. In Q3, our revenue grew 31% year-over-year to $144 million. The number of customers on our platform grew to 868, up 22% year-over-year. Q3 adjusted EBITDA was negative $3.2 million and adjusted net loss per share was essentially breakeven, another major step towards our target of Q4 profitability. These results represent exceptional execution against our pipeline, delivering accelerating revenue growth and strong progress towards our profitability milestone. At the same time, we continue to rapidly expand our pipeline, which more than doubled year-over-year in Q3. Last week, voters in the United States went to the polls and delivered a resounding victory for public transit. Across the country, Americans spoke clearly on the importance of transit services to their communities, approving an overwhelming majority of the ballot measures that were put to a vote and unequivocally reaffirming their bipartisan support for transit. These ballot measures will generate $30 billion in local transit funding over the coming years. This should come as no surprise. As households face the rising cost of gas and car ownership, public transit increasingly serves a critical role in enabling Americans to get to work, doctor appointments and school. These wins at the ballot and the election of transit-friendly officials across the U.S., while an important result, are but a small part of the broader revolution sweeping the massive global public transit market. As the need for transit grows, so does the recognition that our existing systems are not only underfunded, but also operate in antiquated silos, relying on fragmented outdated technology. The need and opportunity to transform public transit systems and to dramatically improve efficiency and customer outcomes remain as great as ever. Via is exceptionally well positioned to capitalize on this opportunity, and we are in the early innings of capturing our $82 billion SAM. For over a decade, we have worked tirelessly to develop deep expertise in every aspect of public transit operations, to collect the extensive data needed to power the most intelligent transit solutions and to build the world's highest performing end-to-end public transit platform. Importantly, our platform was designed from the start as a full stack transit solution, seamlessly bringing together advanced AI-powered software with a broad suite of technology-enabled services. Using our software, cities and transit agencies can plan, schedule and operate their entire transit system on a single fully integrated platform. The technology-enabled services we provide are core to our offering and allow us to directly participate in the delivery of transit to end customers. Via's continued durable growth is a powerful testament to the success of our full stack platform strategy. In Q3, network deals, where we leverage our end-to-end platform to manage entire transit networks continue to be a key driver of our growth. We are winning and launching network opportunities at a rapid rate and now have 10 live network deals. Network opportunities also represent a significant portion of our growing pipeline. When we take over a transit network, we fundamentally transform the operation of the entire system. We begin by leveraging our platform to integrate and streamline operations across silos and to replace existing fragmented technology systems with our software. We introduce technology into every aspect of the service from fleet maintenance to dispatch, regulatory reporting, journey planning and ticketing to name but a few. This process is extensive and touches every aspect of the operation. And in many cases, it requires transitioning processes and systems from pen and paper, retraining staff and adapting operational practices. The benefits of this transformation are striking and they are realized immediately. Digitizing a transit system drives operational efficiencies, reduces costs, meaningfully improves rider and driver experience and provides visibility into the system's performance that was previously lacking. Once the system is digitized and we have established data infrastructure required to measure performance across all aspects of the operation, we begin to reimagine the network. We redeploy fixed route resources to high productivity routes, introduce microtransit to provide coverage in lower density areas and improve access for paratransit riders. When this process is complete, it represents a major evolution for every stakeholder and user of the system. Consider, for example, the experience of a bus driver in a legacy transit system. The weekly schedule on the whiteboard, a batch of keys to sort through to find the one that matches your vehicle, pen and paper vehicle inspection reports, paper manifests with route and stop instructions, paper forms for tracking ridership, manual data entry into disparate antiquated ERP systems, and old-fashioned radio for communicating with dispatch to address real-time incidents. By contrast, on the Via platform, the driver's entire experience is managed digitally through the Via driver app. Drivers claim shifts and manage their schedules in the app. Their route, which can now be dynamic or fixed, is displayed in the app in real time. Drivers complete detailed pre- and post-trip inspections of the vehicle and submit them through the app. They can unlock and lock their vehicle using the app. AI-powered dash cams continuously assess their driving performance and provide immediate feedback through a proprietary safety portal in the app. Dispatch communicates directly with drivers through the app and drivers can track payroll information through their app. Digitizing the driver experience leads to meaningful improvements in operational efficiency and safety. It also provides a rich data set that allows opportunities for further improvement to be identified and actioned. As all other roles in the train system are similarly transformed, the return for our customers is immense as we drive measurable improvements in quality, reliability and efficiency. Equally importantly, our customers gain a level of visibility and insight into their operations that was previously difficult to imagine. The extensive data we collect is also critical to our ability to leverage AI to further boost system performance, enhance staff productivity and improve rider and driver experience. We believe AI represents a massive opportunity to deliver outsized efficiency in our network deals and uniquely positions Via to further differentiate the networks we manage from incumbent providers. Across Via, our use of AI is rapidly accelerating the pace of product development and innovation. This has allowed us to increase the speed with which we deliver new capabilities to our transit customers while also expanding the scope of our solutions beyond transit. Using our driver example, the same driver app capabilities can be relatively easily adapted to serve a snowplow driver or a garbage truck driver or a street speaker, especially by product managers and engineers using AI to accelerate product development. This is the idea behind Via AI Labs that the speed of product development enabled by AI, coupled with agentic solutions and the breadth of existing capabilities we've built for transit can be extended to many other municipal contexts and meaningfully expand Via's ability to provide value to cities. And with that, I'll pass it over to Clara to review the financial highlights for the quarter and our guidance for the year.

Thank you, Daniel. I'm happy to report that Q3 was a milestone quarter for revenue and profitability. For the fifth consecutive quarter as a public company, we achieved our revenue and adjusted EBITDA guidance, continuing to demonstrate our commitment to consistent execution and durable growth. We saw an acceleration of our revenue growth to 31% year-over-year and a robust pipeline, which doubled again year-over-year and reached an all-time high this quarter. We also took a major step forward on our path to profitability this quarter with adjusted net income and adjusted EPS rounding to breakeven, a milestone for Via, setting the stage for our first profitable quarter in Q4. Let's start with the top line. In Q3 2026, our annual run rate revenue, which is defined as our quarterly revenue multiplied by four, was $574 million, representing a year-over-year increase of 31%. This acceleration in revenue growth is the result of our continued pipeline growth, which more than doubled year-over-year and strong sales execution to drive a faster-than-expected conversion of pipeline into revenue. Our growth was particularly strong in the United States, which grew 42% year-over-year and represented 77% of revenue in Q3. The U.S. was also a key factor in our continued pipeline growth, representing the majority of our pipeline this quarter again. We closed the quarter with 868 customers, representing a year-over-year increase of 22%. We are pleased to report strong traction with new network and school customers this quarter. We are also seeing strong momentum with our larger customers. We ended the quarter with 123 customers generating annual run rate revenue of over $1 million, a 41% increase year-over-year. That has supported our annualized revenue per customer, which now stands at $661,000, its highest point ever. Now let's dive into our margins and expenses. Our adjusted gross margin this quarter was 40.5%, up from 39.6% in Q3 2025. As expected, compared with Q2, gross margin in Q3 was more consistent with prior quarters as non-subscription revenue reverted from 5% of revenue in Q2 to 2.5% in Q3. Year-over-year, we saw an increase in gross margin, driven by the positive impact of our ongoing margin improvement efforts, such as our AI products for customer support, optimization of our infrastructure costs and general automation efforts. In Q3, we spent 43% of revenue and adjusted operating expenses compared with 48% in Q3 '25 and 56% in Q3 '24, representing our most efficient quarter in the history of the company. We continue to benefit from a very attractive ROI on our sales and marketing investment with flywheel effects in states where we have sufficient density of customers, meaning that once we reach a certain scale, a minimal incremental investment in sales and marketing is required to drive significant revenue growth for our platform. Our G&A expenses continue to reflect the higher costs associated with being a public company, notably increased accounting and legal costs as well as increased insurance expenses year-over-year. Finally, we saw significant efficiency with our R&D expenses, continuing to demonstrate effective leverage from our automation efforts. Over 95% of our code is written by or with AI, and we are continuing to ship new products and features at our fastest pace ever. Efficiency savings were partially offset by the continued strength of the Israeli shekel this quarter, which is the currency of our largest R&D center. The shekel had a negative impact of approximately $1.6 million on adjusted R&D expenses when compared to Q3 2025. We closed the quarter with an adjusted EBITDA margin of negative 2%. This is a meaningful improvement over negative 8% in Q3 '25 and negative 17% in Q3 '24 and a testament to our ability to deliver rapid revenue growth, improvement in gross margin and continued operating leverage. Our balance sheet remains strong with $323 million in cash and no outstanding debt. Last but not least, adjusted net loss was $0.3 million and adjusted EPS rounded to breakeven this quarter, a significant step function improvement compared with a loss of $0.37 in Q3 '25 and a clear milestone towards our long-term profitability goals. Over the past few years, we have kept growing revenue while operating expenses have risen much more slowly. This quarter, revenue was $144 million and adjusted operating expenses were $61 million. We expect to maintain that discipline going forward. Now let's turn to guidance. For the fourth quarter of 2026, we expect revenue of $150 million to $151.7 million, representing 26.1% to 27.6% year-over-year growth. We expect to deliver our first quarter of positive adjusted EBITDA in the range of $0 million to $1.5 billion, a margin of 0% to 1%. And we also plan to deliver positive adjusted net income and adjusted EPS. For the full year, we are raising revenue guidance by more than the Q3 beat to $556.7 million to $558.4 million, representing 28.2% to 28.6% growth. With most of the year complete, we are narrowing adjusted EBITDA to negative $12.5 million to negative $11 million, a margin of negative 2.2% to negative 2%. It is worth reminding ourselves that the shekel has had a significant impact on our results this year with $5.4 million of negative impact to EBITDA year-to-date when compared to last year. We have taken steps to hedge the vast majority of our shekel exposure for Q4 '26 to lock in our profitability goals. As we look forward to 2027, we're excited about the opportunity ahead. Our pipeline is at a record high. Our team is executing at the highest level, and we're only in the early stages of unlocking the growth potential of AI labs, schools and network deals. With that, I'd like to thank you, and I'll turn it back to the operator for questions.

[Operator Instructions] Your first question comes from the line of John DiFucci with Guggenheim Securities.

Nice job really, nice job Via team. These are really impressive results. I'd like to start with sort of a high-level question. You kind of went through it, but you said your pipeline continues to double year-over-year, implying you're closing some of those deals each period and still adding more deals to the pipeline, which is at a record. And it shows up in all your metrics, whether it's accelerating ARR revenue, customer count, revenue per customer, which, as Clara said, was a record high this quarter of $661K. Can you talk a little bit more about what's driving this? And Daniel, I know you hit on it, but is it just like just execution, your ability to offer a fully integrated platform and this network deal traction? Or is it like this greater awareness of what you're doing since coming public having an impact? And I don't know, maybe there's cross-selling happening into the downtown or customer base or something else because these numbers -- this is an inflection point this quarter.

Thanks so much, John. Great to hear from you, and thanks for the question. We totally agree. We feel this quarter was very strong, and we're very pleased with the results. As we said, it feels like a lot of things are moving forward in the right direction. And I think that's really the answer to your question. There are several factors all playing together, everything from the platform that we've talked about quite a bit, enabling us to cross-sell, enabling us to win more customers more rapidly. Greater awareness is certainly a factor. And as we've talked before, we definitely believe the IPO has contributed to that. So that's been a really nice element. I think the fact that we're able to deliver product innovation and product faster, and we feel with an accelerating pace to our customers is also driving adoption. AI is definitely contributing. So there's just a confluence of factors coming together that we feel are driving these results. And as we look forward, we feel confident in our ability to continue to do that.

Well, that's great. And now you just got to keep it going. Maybe just a quick follow-up. As you know, we've done a lot of work around government spending, and we come to our own conclusions about durability of that, and it seems like it's really durable, especially as we start to hear of -- COVID era funds winding down. But you talked about 50 ballot measures passed in 2026 elections with the incremental $30 billion in local transit funding. That's something we're going to start to dig into. So thanks for pointing that out. Can you give us a little more detail around -- I mean, give us some examples or something to get us started here on that because that sounds really exciting.

Yes, John, thanks. I totally agree with you. I think there's -- it's very clear that the growth that we're following has the potential to be very durable. And if you look at what happened in the ballot, as I mentioned in the prepared remarks, there's just such a strong bipartisan support from Americans during this time when -- what they're -- just we can understand what they're voting for, what they're voting for is often either to maintain or increase local taxes to continue to pay for transit. So in an environment where people are not necessarily that excited about new taxes. The fact that they're interested in supporting transit and are doing so in a bipartisan fashion across the entire country tells you how important people view public transit to be. And that -- the fact that it's also bipartisan across red districts, blue districts is a very powerful signal. Maybe one example that we are very close to is one in Pierce County in Washington State, where there's the transit agency for Pierce County, I think, really was in need of funds in order to expand service, including they have plans to expand micro transit pretty significantly and generally expand transit. So that would be a valid measure that I would look at that I think started out maybe a bit challenged, but very quickly gained momentum and passed with some -- a really nice majority. So there are many others that I could point to, but I think that's one that I would start with. And overall, when you look at what these ballot measures are often planning to fund, what's really interesting to us is they include a lot of on-demand transit and microtransit, which is also exciting. It shows how the industry has transformed in the last -- just a few years since we started with microtransit, how quickly that adoption has come in.

Great. Thank you, Daniel. And by the way, it's not lost on us that you use the word bipartisan several times in that answer, and that's actually, we all know pretty rare.

Your next question comes from the line of Chris Quintero with Morgan Stanley.

Congrats on the nice acceleration here. I want to dig a little bit into that $1 million-plus customer count that also accelerated in the quarter. So just curious like you're obviously landing these bigger network deals, but curious kind of what else you're seeing within that metric, cross-sell into those additional customers that you had for a while, too.

Chris, nice to see you. Thanks for the question and the kind words. We're very pleased about the results this quarter. And thanks for digging into the 1 million-plus customer. You can see they grew 41% year-over-year to 123 customers growing at a faster pace, than overall customer base and overall revenue, which is really exciting. And there are a few components to it. One is that, obviously, we are selling network deals, which tend to be larger, $2.5 million to $50 million is good kind of scale range for those. So they definitely have some impact, but you can see it's not the only impact as we have only 10 of them. The rest is coming from expansion with existing customers and just selling more software and services to them.

All right. Super helpful. And then I know you guys launched the school opportunity and it looks like you got some customers in there today. So curious kind of what you're seeing in that early kind of adoption? And what should we expect for kind of Q4 as you kind of get more of that revenue recognition coming from that?

Thanks, Chris. As you said, schools are continuing to grow very nicely. We continue to believe that is one of the next S-curves that we're layering on top of the growth of the core business, the core transit business. We continue to see nice traction. As expected, Q3 is a very important quarter for schools for obvious reason. We saw some really nice traction, some good customer adds and expect that to continue to contribute into Q4.

Your next question comes from the line of Michael Turrin with Wells Fargo.

This is Camden Levy sitting in for Michael Turrin. Just digging into the guidance for 4Q, the implied sequential net new revenues is a little below like what you did last year. Are there any onetime items or pull forwards in demand that we should keep into consideration as we're thinking about 4Q?

Thanks for the question. I would say we are really pleased so we're able to flow through more than the beat into our Q2 and full year guidance, and we're very pleased with our Q4 guidance. Apologies. And I believe it shows, as you can compare kind of guidance over guidance, continued trends into our acceleration of revenue. So overall, kind of really excited. Obviously, you know that our quarters are each specific. So I'm not sure there's anything to compare to last year. But I would say we're really pleased with the Q4 as it's coming up. And yes, we're excited to flow through the beat into the full year and a bit more than that.

Helpful. And then maybe just one follow-up question from our end. On AI Labs and the cost efficiencies that you guys are achieving in your internal operations, is there a way for us to think about the incremental margin expansion into '27 as a result that you're making to your business operations? And how much of the R&D and sales and marketing efficiencies this quarter were driven by the AI lab mechanics?

I think there's a lot to unpack in your question. I would say we had shared last quarter that we thought gross margin would revert to 40%. So we were pleased to land at 40.5%, so ahead of expectations on gross margin, mostly driven by our efficiency initiatives and the deployment of AI through our COGS, which, for example, with customer support automation and some other automation initiatives that were extremely impactful. And then we're continuing to see leverage throughout the cost structure. They have different -- obviously, there's different drivers on sales and marketing. It's mostly from our flywheel effects because as we sell to a city, the cities around them tend to adopt the solution faster, and we're continuing to see really powerful flywheel effects with our customers and very nice growth, and that's supporting our very significant leverage with sales and marketing. And then on R&D, despite the strength of the shekel, you can see that we've continued to see leverage. And I would say that is mostly driven by AI initiatives and the general automation of our R&D efforts, which are really coming to bear this year and looking very promising.

Your next question comes from the line of Alex Zukin with Wolfe Research.

I echo the earlier congrats on an inflecting quarter. Maybe my first -- I'll ask actually both of them upfront just because I'm in a location. But first, maybe on the network effect deals and the network deals. What kind of -- how do you think about that representing the future growth and opportunity for you over the course of the next 12 to 24 months? And then Clara, just any concept on what we should expect going forward on gross margins? Anything we should kind of take into account to remember or maybe just the trajectory from here as you use more AI services inside of the product?

Thanks, Alex. Great to hear your voice, and thanks for the question. On the network deals, we continue to believe that, that is probably the single most important driver for the business next year. We are seeing really strong traction on that front. And as we are doing more and more of these deals, and hopefully, you can see the acceleration, we went from 1 not that long ago to 10. As we get into these deals and start to understand the opportunity in transforming these networks, and I tried to talk about that a little earlier, we do believe that the opportunity may be even greater than we expected just as far as what's possible in transforming the system, these systems, how efficient we can make them, in some sense, how little technology they're using and the opportunity that, that provides. And then, of course, bringing AI in, which we think we're uniquely capable in doing combined with our services, we believe presents a really powerful opportunity. And so looking forward, we continue to be very excited about that. And we also believe that as we show results, again, with the flywheel effects that we experienced, nearby cities, nearby transit agencies are going to very quickly understand what's possible, and we hope that, that helps us win these opportunities even faster. I'll pass it on to Clara for your second question.

Thanks, Alex. On the gross margin, we -- so we are happy to deliver, as I said, ahead of expectations this quarter. And we expect next quarter and to be consistent, so we don't expect to revert. So we're excited to maintain these efficiencies. And looking forward to next year, we're committed to our long-term gross margin targets and continuing to increase gross margins over time and look forward to delivering on that next year.

Your next question comes from the line of Brian Schwartz with Oppenheimer.