Via Transportation Q3 2026 Earnings Call Transcript

Via Transportation (NYSE:VIA) reported third-quarter financial results on Monday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Via Transportation reported Q3 2026 revenue growth of 31% year-over-year to $144 million, with a customer base increase of 22%.

The company achieved significant milestones towards profitability, with adjusted EBITDA at negative $3.2 million and adjusted net loss per share nearly breakeven.

Via’s pipeline more than doubled year-over-year, driven by network deals and the adoption of their AI-powered platform, contributing to durable growth.

The U.S. market showed strong revenue growth of 42% year-over-year, representing 77% of Q3 revenue, fueled by larger deals and faster adoption.

The company anticipates Q4 2026 to be its first profitable quarter, with expected revenue of $150 to $151.7 million and positive adjusted EBITDA.

Via Transportation highlighted the impact of recent U.S. transit ballot measures, which will generate $30 billion in funding, as a positive indicator for future growth.

Gross margin improved to 40.5%, aided by AI-driven efficiencies and automation efforts, while operating expenses as a percentage of revenue decreased.

The company plans to leverage its full-stack platform and AI capabilities to expand into additional municipal contexts, such as schools and other city services.

Full Transcript

OPERATOR

A question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to the Via Transportation team. Please go ahead.

Gabby McCaig (Chief Corporate Communications Officer)

Good morning and welcome everyone to Via Transportation’s third quarter 2026 earnings call. I’m Gabby McCaig, Via Transportation’s Chief Corporate Communications Officer. With me today are Daniel Ramot, Via Transportation’s Co‑Founder and CEO, and Clara Fain, Via Transportation’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.

Daniel Ramot (Co-Founder and Chief Executive Officer)

Thanks, Gabby, and thank you, everyone, for joining us today. We’re thrilled to report another exceptional quarter for Via Transportation. 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 costs 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 Transportation 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 Transportation’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 — continued 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 the 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 a 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; an old‑fashioned radio for communicating with dispatch to address real‑time incidents.

By contrast, on the Via Driver app, the driver’s entire experience is managed digitally. 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 transit 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 Transportation to further differentiate the networks we manage from incumbent providers. Across Via Transportation, 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 sweeper, 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 Transportation’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.

Clara Fain (Chief Financial Officer)

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 break even, a milestone for Via Transportation, 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 on adjusted operating expenses, compared with 48% in Q3 2025 and 56% in Q3 2024, 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’re 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 2025 and negative 17% in Q3 2024, 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 break even this quarter, a significant step-function improvement compared with a loss of $0.37 in Q3 2025 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 to $151.7 million, representing 26.1% to 27.6% year-over-year growth. We expect to deliver a first quarter of positive adjusted EBITDA in the range of $0 to $1.5 million, 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 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 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 2026 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

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of John Defucci with Guggenheim Securities. Your line is open. Please go ahead.

John Defucci (Analyst)

Thank you. And nice job—really nice job, Via Transportation 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 at $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 execution, your ability to offer a fully integrated platform, and this network yield traction? Or is it greater awareness of what you’re doing since coming public having an impact? And, or I don’t know, maybe there’s cross-sell happening into the downtown or customer base, or something else? Because these numbers—this is an inflection point this quarter.

Daniel Ramot (Co-Founder and Chief Executive Officer)

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 you 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 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.

John Defucci (Analyst)

Well, that’s great. And now you just got to keep it going. Maybe just a quick follow-up. You know, 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.

Daniel Ramot (Co-Founder and Chief Executive Officer)

Yeah, John, thanks. I totally agree with you. I think 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 strong bipartisan support from Americans during this time. Just so 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 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 the transit agency for Pierce County really was in need of funds in order to expand service, including—they have plans to expand microtransit pretty significantly—and generally expand transit. So that would be a ballot measure that I would look at that I think started out maybe a bit challenged, but very quickly gained momentum and passed, passed with 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.

John Defucci (Analyst)

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

Daniel Ramot (Co-Founder and Chief Executive Officer)

Thanks, John.

OPERATOR

Your next question comes from the line of Chris Quintero with Morgan Stanley. Your line is open. Please go ahead.

Chris Quintero (Analyst)

Hey, Daniel. Hey, Clara. Thank you for taking the questions, and 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—you’re obviously landing these bigger network deals, but curious what else you’re seeing within that metric—cross-sell into those additional customers that you’ve had for a while, too?

Daniel Ramot (Co-Founder and Chief Executive Officer)

Hey, Chris, nice to see you and 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 are 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’re selling network deals which tend to be larger.

Two and a half to 15 million is a good kind of scale range for those. So they definitely have some impact. But you can see it’s not the only impact. We have only 10 of them. The rest is coming from expansion with existing customers and just selling more software and services to them.

Chris Quintero (Analyst)

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 on what you’re seeing in that early kind of adoption and what should we expect for Q4 as you get more of that revenue recognition coming from that.

Daniel Ramot (Co-Founder and Chief Executive Officer)

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 reasons. We saw some really nice traction, some good customer adds, and expect that to continue to contribute into Q4.

Chris Quintero (Analyst)

Excellent. Thank you so much.

OPERATOR

Your next question comes from the line of Michael Turin with Wells Fargo. Your line is open. Please go ahead.

Camden Levy (Analyst)

Hi, good morning, this is Camden Levy sitting in for Michael Turin. Thank you for taking our question. Just digging into the guidance for Q4. The implied sequential net new revenues is a little below what you did last year. Are there any one-time items or pull-forwards in demand that we should keep into consideration as we’re thinking about Q4?

Clara Fain (Chief Financial Officer)

Hi, thanks for the question. I would say we are really pleased. We were able to flow through more than the beat into our Q2 and full-year guidance, and we’re very pleased with our Q4 guidance. We believe it shows, if you compare guidance over guidance, continued trends into our acceleration of revenue. So overall, really excited. Obviously, you know that our quarters are each specific, so not sure there’s anything to compare to last year. But I would say we’re really pleased with Q4 as it’s coming up.

And yeah, we’re excited to flow through the beat into the full year and a bit more than that.

Camden Levy (Analyst)

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 the results 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?

Clara Fain (Chief Financial Officer)

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 cloud, which, for example, includes customer support automation and some other automation initiatives that were extremely impactful. And then we’re continuing to see leverage throughout the cost structure.

Obviously, there are 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. 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. I would say that is mostly driven by AI initiatives and a general automation of our R&D efforts, which are really coming to bear this year and looking very promising.

Camden Levy (Analyst)

Thank you. Helpful. I appreciate it.

OPERATOR

Your next question comes from a line of Alex Zukin with Wolfe Research. Your line is open. Please go ahead.

Alex Zukin (Analyst)

Hey guys, thanks for taking the question, and I echo the earlier congrats on an inflecting quarter. Maybe my first—I’ll ask both of them up front just because I’m in a loud location. First, on the network effect deals and the network deals, 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, any concept on what we should expect going forward on gross margins—anything we should take into account or maybe just the trajectory from here as you use more AI services inside of the product?

Thanks again.

Daniel Ramot (Co-Founder and Chief Executive Officer)

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. As we are doing more and more of these deals—and hopefully you can see the acceleration; we went from one not that long ago to 10—as we get into these deals and start to understand the opportunity in transforming these networks, we do believe that the opportunity may be even greater than we expected, just as far as what’s possible in transforming 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 of doing, combined with our services, presents a really powerful opportunity.

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 experience—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.

Clara Fain (Chief Financial Officer)

Thanks, Alex. On the gross margin, we are happy to deliver, as I said, ahead of expectations this quarter, and we expect next quarter to be consistent, so we don’t expect to revert. We’re excited to maintain these efficiencies. 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.

OPERATOR

Your next question comes from the line of Brian Schwartz with Oppenheimer. Your line is open. Please go ahead.

Brian Schwartz (Analyst)

Yes, hello, good morning. Thank you for taking my questions. Daniel, I wanted to shift the discussion over to the two different geographies—the U.S. strength versus the international demand. Your U.S. revenue is growing significantly faster than the overall growth of the company. Maybe on the U.S. side, what’s driving that outperformance? Is it larger awards, faster implementations, customer expansions, or maybe all of the above? And then on the international growth gap, is that primarily procurement timing, or is there a more persistent demand difference between the two geographies?

Daniel Ramot (Co-Founder and Chief Executive Officer)

Thanks, Brian. Great to hear you. As you said, the U.S. is showing some really strong growth. As we mentioned, we grew 42% year over year in the U.S. this past quarter. From our perspective, that’s an outstanding result, and that’s driven primarily by just faster adoption and the growth in the size of the deals. Penetration into these network opportunities is starting to take off from our perspective. And then this is still very early, but some of these additional S-curves that we’ve talked about layering on top of our core business—schools, AI Labs—we continue to see those as really big opportunities as we look forward.

So the U.S. strength is very encouraging, and we believe to be quite durable. And the rest of the world—specifically Germany, which we’ve talked about—we do believe that that situation has stabilized, and we’re looking forward in the coming quarters to return that to growth. We saw some encouraging signs in the last quarter, and we’re hoping that that can persist as we look forward into next year.

Brian Schwartz (Analyst)

Thank you. And then the follow-up question I had for Clara, just on the cash conversion—the operating cash flow was a use of $14.5 million, but the adjusted EBITDA loss was only about $3 million. And I can see that the receivables were consuming almost $19 million of cash. So is that just primarily collection timing around new deployments, or does the growth model require structurally more working capital? Thanks again for taking my question.

Clara Fain (Chief Financial Officer)

Thanks, Brian. Good observation. On the cash, I would say it’s two drivers. One, we’ve been growing really fast. Initially, when we launch, it tends to be a slightly longer lag with the first invoice, which is driving some collection delays. And then, our customers are government customers—they tend to pay on their own timeline. We expect—obviously, we’ve never had any kind of material issue with the customers—we expect that they will pay. There’s just been some timing.

So what you’re seeing here is timing, and it should revert next quarter.

OPERATOR

Your next question comes from the line of Patrick Walravens with Citizens JMP. Your line is open. Please go ahead.

Patrick Walravens (Analyst)

Oh, great. And let me add my congratulations. It’s really great to see how the team executed this quarter. I’m going to go a little deeper on Brian’s question. So last quarter, Clara, Germany was $18 million, down 12% year over year. Where was it this quarter?

Clara Fain (Chief Financial Officer)

Hey, Pat, great to see you, and thanks for the kind words. Germany was stable quarter over quarter. It was up 1% this quarter versus last quarter at $18.4 million. As we said, we’re seeing a stabilization of the German market and are starting to see the first signs of potential returning to growth. We’re working on reigniting the market and getting it back to growth as soon as we can.

Patrick Walravens (Analyst)

Wonderful. And then it’s a little early for this, but do you have any pointers for us in terms of how we should think about 2027 growth? I mean, you’re going to exit the year at 27%—sort of at the midpoint of your range. So how do we think about next year?

Daniel Ramot (Co-Founder and Chief Executive Officer)

Thanks, Pat. I can just say at this point that we’re really pleased with the results and the acceleration of the growth, and we are excited to continue. I think this quarter was the first real concrete conversion of our pipeline into revenue, and we’re excited to continue to execute against the pipeline. Pipeline is at a record high, which is a very good signal—we’ve executed this quarter—and so we’re excited to deliver rapid and durable growth, which we believe our market and company warrant for next year.

Patrick Walravens (Analyst)

Okay, thank you, guys.

OPERATOR

Your next question comes from the line of Jonathan Ho with William Blair. Your line is open. Please go ahead.

Jonathan Ho (Analyst)

Hi, good morning, and let me echo my congratulations as well. Just wanted to start out with the go-to-market investments that you made historically. Can you update us on what’s been most effective, as well as, you know, maybe in terms of sports analogies, how far we are along, either in terms of innings or whatever metric might make sense, in terms of where you are in realizing the success that we’ve seen here?

Daniel Ramot (Co-Founder and Chief Executive Officer)

Thanks, Jonathan. Great to see you. I would say I think we’re still very early, from our perspective, in penetrating this market. We’re starting to see some exciting signs through the adoption, as we saw in the results from the last quarter, but still very early. The things that I think work are developing this very strong consultative sales capability, really working with our customers to help them come up with solutions and solve problems, understanding where they’re coming from. We have a muscle that we’ve built over the years in responding to public procurements, responding to RFPs, which is really critical, making that as efficient as possible, and just finding the right places to meet our customers where they are, whether it’s at the right conferences, visiting with them, introducing them to other customers nearby to accelerate the flywheel effects that we’re seeing.

Those are the sorts of actions that we’re finding are most effective without giving away our secret sauce. And it still feels very early. When you look across the country, everywhere where we have—certainly if you look at where we have a network deal—there are a large number of very similar agencies and cities right nearby that we believe, if they adopted our solution, would see dramatic gains in their service. So we’re pretty excited about where that can go over the coming years.

Jonathan Ho (Analyst)

Excellent. And then just in terms of the 2026 referendums and the timeline with which they usually translate to the pipeline, is there a way to maybe help us understand how this moves from the ballot to RFP to potential revenue opportunity? What does that typically look like from a cycle perspective? Thank you.

Daniel Ramot (Co-Founder and Chief Executive Officer)

Thanks. That’s a great question. Obviously, they vary. I would say some, you could imagine, within a few months translating into potential opportunities. As agencies understand the funding that they’ll have available, they may start to procure based on that. Some could take a little bit longer. But we’re not talking five years out. It’s sort of an order of maybe a few months to maybe many months, maybe a year or two. But that’s the range where I would think of opportunities that might come out that are relevant to us.

Jonathan Ho (Analyst)

Thank you.

OPERATOR

Your next question comes from the line of Brian Peterson with Raymond James. Your line is open. Please go ahead.

Brian Peterson (Analyst)

Thanks for taking the question, and I’ll echo my congrats. It was a great quarter. I’d actually love to follow up on that line of thinking as the $30 billion that you guys mentioned. I’d love to understand maybe how much of that is in states where you already have that flywheel effect and you’re likely to win some of that spending, versus maybe where there’s an incremental opportunity in geographies where you don’t have as strong of a presence.

Daniel Ramot (Co-Founder and Chief Executive Officer)

Yeah, thanks, Brian. Thanks for the kind words, and great to hear you. I think we’re seeing these opportunities all over the country, so there’s just a mix. Some of them are absolutely, you know, smack dab within our flywheel and are very exciting and could be great near-term opportunities with a high probability that we may benefit from them. And others are in new geographies where, you know, we’re tracking them very closely, where with this funding now available, we may direct some sales and marketing efforts and try to get to know those folks and hopefully leverage that opportunity to help them utilize the funds as efficiently as possible.

Which is really our focus here, right, is trying to help these government agencies take this hard-won taxpayer money and make sure that it’s utilized in the most efficient way possible.

Brian Peterson (Analyst)

Understood. And maybe as a follow-up, as we think about some of these large network opportunities that you have in the pipeline, how have those sales cycles or processes progressed over the course of 2026, and as these become more commonplace, would you envision that those become a little bit shorter as we go into 2027 and beyond? Thanks, guys.

Daniel Ramot (Co-Founder and Chief Executive Officer)

Yeah, thanks, Brian. I think generally what we saw in 2026, which was encouraging and was our hope, is that the sales processes for these network deals are fairly consistent with our historical sales processes. They’re larger, certainly, and more complex, more involved, but they run through similar procurement processes in the end. And so we have not seen a material difference, I’ll say, between those opportunities and our historical pipeline process and conversion.

I think as we move forward there’s obviously an opportunity to accelerate these. Knowing our customers and their procurement processes, I don’t think we’ll see anything dramatic. But there’s hope that as the value becomes clearer, there’s more eagerness to make the transition, and therefore you might see some shortening of the sales cycle. But currently our assumption is that this will stay consistent.

Brian Peterson (Analyst)

Great, thank you.

OPERATOR

Your next question comes from the line of Brad Zelnick with Deutsche Bank. Your line is open. Please go ahead.

Chris Fountain (Analyst)

Hi, this is Chris Fountain on for Brad. Thanks for taking my question. Clara, ARR per customer continues to trend very nicely and reached a record high despite a growing contribution from some of those school district wins and seemingly driven by the $1 million-plus cohort. I was wondering if you could unpack some of the puts and takes between those dynamics and explain what’s driving the continued increase in ARR per customer.

Clara Fain (Chief Financial Officer)

Hey Chris, thanks for the question. And I think you summed it up really nicely this quarter. While you would normally expect schools customers to start in September and then dilute your overall ARR per customer, we were able to more than offset that dilution with higher-than-expected growth from large customers. So we’re very pleased with that and the continued growth with our large customers. And with the current pipeline as it looks, if we can continue to execute, we feel very positive about continued growth in our ARR per customer.

Chris Fountain (Analyst)

Got it, thanks a lot. And with the school wins a really nice highlight in the quarter, maybe could you just spend a minute and walk us through the basic economics of a typical win? Anything we should know about implementation time to revenue ramping, or different gross margin profile relative to your core transit business?

Clara Fain (Chief Financial Officer)

Thanks, Chris. I think what’s kind of important is that schools have some seasonality. They generally launch in September, and they tend to ramp through Q4 and then tend to ramp down around summer months. So Q3 tends to be kind of a slower quarter for schools. We’re pleased with our progress on the schools vertical and, like I was saying, we’ve layered the S-curves of growth. We’ve been seeing higher gross margin from that vertical and look forward to continuing to execute there.

The schools business is pretty early, but we’re very excited about the growth we’re seeing there and just the overall opportunity.

OPERATOR

There are no further questions at this time. This concludes today’s call. Thank you for attending. You may now disconnect.

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