Marti Technologies, Inc. Third Quarter 2026 Earnings Call - MARTI TECHNOLOGIES INC

Financial Performance:

• Reported record Q3 2026 revenue of $24.7 million, a 128% year-over-year increase.
• Achieved record gross profit margin of 81.5%, with gross profit rising 176% to $20.2 million.
• Reported first-ever positive income from operations at $2.7 million, compared to a loss of $8.8 million in the prior year quarter.
• Adjusted EBITDA reached $5.6 million (23% margin), nearly doubling from Q2 and up 23% year-over-year.
• Net loss narrowed 91% to near break-even ($1 million), excluding $2.2 million in non-cash share-based compensation which would have resulted in net income.
• Generated $1 million in operating cash flow and close to $1 million in free cash flow, marking the second consecutive quarter of positive FCF.
• Nine-month Adjusted EBITDA of $8 million already exceeds the full-year guidance of $7 million.
• Cost of revenue as a percentage of revenue dropped significantly from 63% to 19% year-over-year.
• Revenue for the first nine months ($60.1 million) represents 71% of full-year guidance.

Guidance and Future Outlook:

• Reaffirmed full-year 2026 guidance of $85 million in revenue and $7 million in Adjusted EBITDA.
• Q4 is expected to be seasonally slower than Q2 and Q3; therefore, management is not revising full-year guidance upward.
• Full-year revenue guidance for 2026 is projected to be met, with Q1-Q3 already delivering 71% of the target.
• Management expects to provide 2027 forecasts based on returns from upcoming marketing investments.
• Strategic focus remains on scaling the network in 40 cities, covering 90% of Turkey's GDP, with future growth driven by maturing existing markets rather than new city cost structures.
• Autonomous vehicle pilots are expected to commence in closed areas of Istanbul soon, with sub-10 vehicles deployed over the next 6-12 months.

Business Segments and Product Lines:

• Expanded ride-hailing service to 40 cities in October, up from 30 at the end of Q3, now covering 90% of Turkey's GDP.
• Ride-hailing remains the primary growth driver; all-time unique ride-hailing riders reached 5.1 million (up 81% YoY), and registered drivers reached 597,000 (up 54% YoY).
• Q3 added a record 650,000 drivers and 53,000 riders, exceeding quarterly targets.
• Multi-service engagement is stronger than single-service: multi-service consumers complete 3.2x more trips and generate 2.8x more revenue per user.
• Decommissioning strategy for legacy two-wheeled electric vehicles reduced average daily fleet from 22.3k to 20.8k vehicles.
• Autonomous mobility ecosystem expanded with partnerships with Tensor, Calm Car, and Concar; the first autonomous vehicle equipped with Concar tech has arrived for testing.
• Platform has facilitated over 217 million trips serving 8.9 million unique consumers since inception.

Market and Competitive Landscape:

• Marti operates as the number one urban mobility app in Turkey across iOS and Android.
• Identifies as the only operator in Turkey offering scale for both car and motorcycle hailing.
• Management describes the current competitive environment in ride-hailing as having "no meaningful competition," positioning the company as selling "water in the desert."
• Market potential estimated at over 1 billion annual trips (approx. 4 million daily), with Marti currently annualizing under 100 million trips.
• Localized operational expertise and brand recognition are cited as key competitive moats against global entrants.
• Two-wheeled electric vehicle market is competitive, but ride-hailing is the dominant sub-segment where Marti holds clear leadership.

Risks and Challenges:

• Legal landscape: While operating without impediment, the company faces ongoing court cases regarding ride-hailing regulations; management views the recent appeals court victory as a strong precedent for entrepreneurship freedom but notes cases may proceed to higher courts.
• Seasonality: Q4 historically shows slower performance for ride-hailing and e-mobility businesses.
• Dilution: Issuance of shares under the October convertible note agreement and the new Management Incentive Plan (10% of fully diluted shares) will impact share count.
• Execution risk in autonomous vehicle deployment, which remains in early pilot phases with undefined financing models.

Management Commentary and Tone:

• Tone is highly confident and celebratory, describing Q3 as a "breakthrough quarter" and highlighting the transition from growth-stage scaling to operating leverage.
• Management emphasizes that the strategy of building a large network and monetizing it is "working," evidenced by record margins and profitability.
• CEO Alper Oktem and COO John Goodzergen expressed strong belief in Turkey's structural cost advantages (lower labor/insurance costs) allowing for margins above international benchmarks.
• Management acknowledged that previous estimates regarding gross margin caps (80%) were conservative, noting the possibility of margins trending higher.

Analyst Questions and Answers:

• 2027 Forecast & Guidance: Q4 revenue/EBITDA guidance was not raised due to seasonality and planned marketing spend to drive 2027 growth.
• Monetization: Effective take rates remain stable (~18%) in monetized cities (approx. 8-9 cities); new cities typically require 2-2.5 years of operation before monetization increases.
• Convertible Note: An October 2029 convertible note facility of $100 million was extended to July 2028; commitment shares will be issued this quarter.
• Legal: Legal battles are described as a "war of attrition" by opponents, but Marti is winning on all fronts and expects these issues to fade into the background as scale increases.
• Autonomous Vehicles: AV pilots will have negligible immediate financial impact; Marti leverages its micro-mobility operational experience as a strategic advantage for AV logistics.

Other Key Points:

• Adjusted EBITDA calculation methodology was revised as of Q2 2026; prior periods were restated to conform.
• The company has built a "multi-service platform" combining ride-hailing, delivery, and micro-mobility to enhance liquidity and engagement.
• AI integration is being used to refine dynamic pricing, supply/demand forecasting, and batch matching algorithms to improve efficiency.
• The company operates out of a single HQ in Istanbul, allowing for low-cost city expansion without significant local infrastructure investment.