CBRE GROUP, INC. (CBRE) Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered broad-based strength with revenue up 16% to $9.75B, GAAP EPS up 71% to $0.72, and Core EPS up 47% to $1.19; Core EBITDA rose 30% to $658M, reflecting operating leverage across Advisory, BOE, and Project Management .
• CBRE raised FY 2025 Core EPS guidance to $6.10–$6.20 (from $5.80–$6.10); management noted at least a $0.10 uplift based on forward FX curves, citing stronger leasing pipelines and segment outperformance .
• Results exceeded Wall Street consensus: EPS $1.19 vs $1.07 and revenue $9.75B vs $9.46B; beats were driven by global property sales (+20%), leasing (+14%), and mortgage origination (+44%) with strength in U.S., APAC, and EMEA .
• Liquidity expanded to ~$4.7B after a $1.1B bond offering and revolver expansion; net leverage was 1.47x TTM Core EBITDA with capacity for buybacks/M&A—stock catalysts include raised guidance, strong pipelines, and accelerating transactional activity despite capital markets volumes below prior peaks .

What Went Well and What Went Wrong

• What Went Well

  • Advisory Services delivered an “excellent quarter”: global leasing revenue reached the highest level for any Q2 in company history, with U.S. office and industrial leading; EMEA +18% (LC +13%), APAC +12% (LC +11%) . “Resilient revenue grew faster than transactional,” underscoring mix shift progress (CEO) .
  • Capital Markets outperformed: global property sales +20% (LC +19%), U.S. +25% led by data centers, office, retail; mortgage origination +44% with GSEs, debt funds, CMBS; CFO emphasized strong July pipelines .
  • Building Operations & Experience and Project Management showed margin expansion and SOP growth; BOE revenue +19% and property management +30% aided by Industrious; Project Management SOP margin improved amid Turner & Townsend integration synergies (CEO/CFO) .

• What Went Wrong

  • Free cash flow was seasonally weak in the quarter ($2M), reflecting operating cash flow of $57M and capex timing; corporate operating loss increased by ~$22M .
  • REI revenue declined 7% YoY to $215M, and Investment Management operating profit fell to $31M vs $39M prior year due to lower carried interest, partially offset by recurring fee growth .
  • Europe sales showed some slowdown into H2 even as U.S. pipelines strengthened; management cautioned tougher comps in leasing (especially office) in the back half despite improved trajectory .

Financial Results

• Q2 beat vs estimates: Revenue beat by ~$0.30B and EPS beat by ~$0.12; core profitability broadened across segments .
• Note: Values marked with an asterisk (*) are retrieved from S&P Global.

Segment performance (Q2 2025 vs Q2 2024):

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “Resilient revenue rose 17%, surpassing the 15% growth rate for transactional businesses… Resilient revenue growing faster than transactional revenue during a market recovery attests to the progress we’ve made with our resilient businesses” .
• CEO: “We have increased our earnings outlook for the year and expect to set a new peak just two years after the 2023 trough… even though capital markets activity remains well below prior peak levels” .
• CFO: “Our second quarter results exceeded our expectations, with core EBITDA and core EPS growing 30% and 47%… global property sales rose 19% [USD +20%], mortgage origination fees increased by more than 40%” .
• CFO: “We completed a $1.1B bond offering and expanded our revolving credit facility, increasing our liquidity to $4.7B… we expect to end the year with about one turn of net leverage” .
• CEO on Project Management: “We’re seeing both cost and revenue synergies… moving professionals onto Turner & Townsend systems… large new business from bringing Turner & Townsend into legacy CBRE clients” .

Q&A Highlights

• Leasing trajectory: Office leasing strong and broadening beyond prime assets into secondary markets; comps get tougher in H2 but pipelines improved versus 90 days earlier (CEO/CFO) .
• Capital markets: Expect continued strength in sales and refinancing; U.S. activity accelerating into July, Europe slowing; interest rates bracketed in outlook (CEO/CFO) .
• BOE synergies: Significant, multi-year opportunity; not quantified yet; majority incremental operating leverage expected to show in 2026 (CEO/CFO) .
• Capital allocation: Guidance embeds neither M&A nor buybacks; prioritizing resilient/securely favored targets; explicitly not pursuing advisory capital markets M&A at present (CFO) .
• Infrastructure focus: Expanding exposure via Turner & Townsend, IM infrastructure fund, data center mgmt and development; strategic growth area (CEO) .

Estimates Context

• Q2 2025 beats: Core EPS $1.19 vs $1.07 consensus; Revenue $9.754B vs $9.456B consensus; # of estimates: EPS (11), Revenue (7). Expect upward revisions to FY Core EPS following guidance raise, supported by stronger leasing and transactional momentum .
• Note: Values marked with an asterisk (*) are retrieved from S&P Global.

Key Takeaways for Investors

• Mix improvement is tangible: Resilient businesses growing faster than transactional, adding earnings durability while transactional engines re-accelerate—supports multiple expansion and reduces cyclicality .
• Guidance upgrade is credible: Raised FY Core EPS with FX tailwind and visible leasing pipelines; watch for H2 execution vs tougher comps and Europe choppiness .
• Transactional momentum is a near-term catalyst: Property sales and origination activity strengthening in U.S. with narrow bid-ask spreads; July trends positive—benefits Advisory results and sentiment .
• BOE/PM integration unlocks margin runway: 2024 cost work lifted margins; 2026 targeted synergies could add operating leverage—monitor progress and quantification milestones .
• Capital allocation flexibility: Liquidity ~$4.7B and net leverage 1.47x provide capacity for selective M&A and opportunistic buybacks; guide excludes both, creating optionality for upside .
• REI is stabilizing: Despite lower carried interest, recurring IM fees up; development turned profitable; watch Q4 asset sales (incl. data center sites) as timing driver .
• Trading lens: Raised guide + U.S. transactional strength are immediate positives; potential headwind from Europe sales softness and quarterly FCF seasonality—position for beats on leasing/sales cadence and any synergy disclosures .

Values marked with an asterisk (*) are retrieved from S&P Global.