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CBRE GROUP, INC. (CBRE) Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered record core earnings and free cash flow, with Revenue $10.40B (+16% YoY), Net Revenue $6.13B (+18% YoY), GAAP EPS $1.58 and Core EPS $2.32; Core EBITDA rose 47% YoY to $1.09B .
  • Broad-based strength: leasing up 15% globally (U.S. office +28%), property sales up 35%, mortgage origination +37%; GWS net revenue +18.5% with margin expansion; REI SOP more than doubled on data center monetizations .
  • 2025 guidance initiated: Core EPS $5.80–$6.10 (mid-teens growth), FCF ~$1.5B, net leverage <1x absent M&A; currency headwind embedded at 1–2% .
  • Strategic catalysts: acquisition of Industrious and resegmentation into BOE and Project Management to accelerate resilient growth; $806M buybacks since Q3 end signal confidence .

What Went Well and What Went Wrong

What Went Well

  • “Best quarter ever” for core earnings and free cash flow, driven by strong execution across businesses, with Core EPS $2.32 and FCF $1.377B in Q4 .
  • Leasing strength broad-based: global +15% (U.S. office +28%), with gateway markets up ~30% and faster growth in Dallas/Atlanta/Seattle; management sees durable office leasing recovery .
  • Capital Markets inflected: property sales +35% globally (U.S. +37%; EMEA +53%; APAC +29) and mortgage origination +37% (fees +76%), reflecting broad pickup across financing sources .

What Went Wrong

  • Investment Management operating profit was down in Q4 (~$27M) given ramp-up of costs ahead of capital raising, despite AUM ending at $146.2B (FX headwinds) .
  • Core corporate operating loss increased by ~$7M YoY on higher incentive compensation tied to improved performance .
  • Estimates comparison unavailable via S&P Global at time of request; beats/misses vs Wall Street consensus cannot be assessed in this report (SPGI rate limit) [GetEstimates tool error; see Estimates Context].

Financial Results

Consolidated Financials vs Prior Quarters (USD)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($MM)$8,391 $9,036 $10,404
Net Revenue ($MM)$4,971 $5,318 $6,134
GAAP EPS ($)$0.42 $0.73 $1.58
Core EPS ($)$0.81 $1.20 $2.32
Core EBITDA ($MM)$505 $688 $1,086

Segment Breakdown (Net Revenue, SOP, Margin)

Segment MetricQ2 2024Q3 2024Q4 2024
Advisory Net Revenue ($MM)$2,195 $2,371 $3,061
Advisory SOP ($MM)$344 $414 $674
Advisory SOP Margin on Net Rev (%)15.7% 17.5% 22.0%
GWS Net Revenue ($MM)$2,547 $2,652 $2,799
GWS SOP ($MM)$258 $318 $393
GWS SOP Margin on Net Rev (%)10.1% 12.0% 14.0%
REI Revenue ($MM)$232 $302 $275
REI SOP ($MM)$10 $67 $150

KPIs and Balance Sheet

KPIQ2 2024Q3 2024Q4 2024
Cash Flow from Operations ($MM)$287 $573 $1,340
Free Cash Flow ($MM)$220 $494 $1,377
Net Leverage (Net Debt/Core EBITDA)1.58x 1.26x 0.93x
Liquidity ($B)~$3.7 ~$4.0 ~$4.4
Shares Repurchased (QTD)$48M; ~0.6M sh @ $87 avg $62M; ~0.6M sh @ $109 avg $806M; ~6.05M sh @ $133.32 avg since Q3-end
AUM ($B)$142.5 $148.3 $146.2
Dev In-Process ($B)$18.8 $19.0 $18.8
Dev Pipeline ($B)$13.1 $13.4 $13.7

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core EPS (non-GAAP)FY2025No prior explicit range$5.80–$6.10Initiated
Currency Translation ImpactFY2025N/AHeadwind embedded 1–2%New detail
Free Cash FlowFY2025N/A~ $1.5BMaintained strong FCF outlook
Net LeverageFY2025N/A<1x absent material M&A; willing to lever to ~2x for M&ANew detail
Tax RateFY20252024 actual ~18%Normalize to ~22%Higher (normalized)
Q1 SeasonalityFY2025N/AQ1 smallest; high-teens core EBITDA growth YoY; low double-digit % of FY Core EPSClarified
Segment SOP Growth (Local Currency)FY2025N/AAdvisory: low–mid-teens; BOE: high-teens; Project Mgmt: low–mid-teens; REI: up YoY with >50% of dev profits from data center monetizationsSegment outlook set

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Data centers and AI tailwindsT&T managing >100 hyperscale DCs; Direct Line acquisition; multi-pronged DC exposure (Q2/Q3) DC monetizations drove REI SOP; DC contribution to core EBITDA grew from ~3% to ~10% over 3 years; >700 DCs managed; T&T >150 DC projects underway Strengthening secular tailwind
Capital markets recoveryQ3 property sales +14% YoY; early steady recovery expected; not precipitous (Q3) Q4 property sales +35% YoY; muted/steady recovery expected in 2025; early-year U.S. sales +20% in first six weeks Improving steadily
Office leasing trajectoryQ2 U.S. office +~30%; Q3 office revenue +26% (record Q3) Q4 U.S. office +28%; gateway markets ~30% and broader market acceleration; term and square footage per lease up Broadening, more durable
GWS margin expansionCost actions improved margins; aim for steady increases (Q2/Q3) Q4 GWS SOP margin on net rev +160 bps YoY; more expansion expected in 2025 under BOE Continuing improvement
Investment ManagementFundraising improving; incentive fees boosted Q3; AUM stabilized (Q2/Q3) Q4 IM OP down on cost ramp; expect near-record capital raising in 2025; flat IM OP YoY excluding prior incentive fee Reinvesting for growth

Management Commentary

  • “The fourth quarter was CBRE’s best quarter ever for core earnings and free cash flow with broad strength across our business.” — CEO Bob Sulentic .
  • “We expect to easily set a new peak in 2025 with core EPS projected to be in the range of $5.80 to $6.10.” — CFO Emma Giamartino .
  • “Office occupiers are increasingly comfortable making long-term decisions… office leasing revenue growth was strong in every global region, paced by a 28% gain in the United States.” — Management commentary in press release .
  • “Property sales revenue growth accelerated to 35%… Mortgage origination revenue rose 37%… 76% increase in loan origination fees.” — Press release .
  • “We have repurchased approximately 6.05 million shares for $806 million… since the end of third-quarter 2024.” — Capital allocation update .

Q&A Highlights

  • Capital markets outlook: Management anticipates a steady, muted recovery rather than a sharp snapback; U.S. sales activity +20% early in 2025 but rate trajectory uncertain .
  • Advisory SOP drivers: Low double-digit revenue growth plus margin expansion expected to fuel SOP growth in 2025 .
  • Development/REI: Data center site monetizations were a key Q4 driver; plan to break ground on >50 projects in 2025; ~$900M embedded net profits in dev pipeline .
  • Buybacks vs M&A: 2025 EPS guide excludes incremental buybacks/M&A; pipeline prioritized, with buybacks used to “fill in” if deals don’t close .
  • Industrial leasing: Expect low single-digit growth and lower vacancies by year-end 2025; deliveries down, setting up better post-2025 outlook .

Estimates Context

  • Wall Street consensus via S&P Global (EPS and Revenue for Q4/Q3/Q2) was unavailable at time of request due to SPGI rate limits; as a result, this report does not present beat/miss vs consensus for Q4 2024 (estimates comparisons omitted). Management indicated Q4 exceeded internal expectations across “almost every metric” .

Key Takeaways for Investors

  • Earnings quality improving: resilient businesses (BOE/Project Management) drive margin expansion and SOP growth; 2025 Core EPS $5.80–$6.10 implies mid-teens growth despite muted capital markets recovery .
  • Leasing breadth is the surprise: U.S. office +28% with broader market breadth and longer terms; supports a stronger advisory margin trajectory into 2025 .
  • Capital markets upside optionality: Q4 sales +35% and mortgage origination +37%; any rate stability/declines could push activity toward the top end of guidance .
  • REI as a hidden asset: DC land monetizations and a $32B in-process+pipeline with ~$900M embedded profits set up multi-year profit harvests; near-term 2025 dev profits >50% from DC sites .
  • Balance sheet headroom: net leverage 0.93x and ~$4.4B liquidity supports accretive M&A and buybacks; willingness to lever to ~2x for the “right” deals .
  • Segment resegmentation catalyst: BOE and Project Management unifies operating scale and experience; Industrious acquisition adds flexible workplace growth and cross-sell .
  • Trading implications: Near term, evidence of broad leasing strength and margin expansion underpins EPS momentum; medium term, steady capital markets recovery plus DC secular tailwinds can drive estimate revisions and multiple support .

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