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C&

Cushman & Wakefield plc (CWK)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered broad-based growth and margin expansion: total revenue rose to $2.28B (+5% YoY), service line fee revenue to $1.54B (+3% YoY), and Adjusted EBITDA to $96.2M (+23% YoY) with margin +103 bps to 6.2% .
  • Strong beats vs S&P Global consensus: Adjusted EPS $0.09 vs Primary EPS estimate $0.02*, and revenue $2.28B vs $2.24B*; Adjusted EBITDA $96.2M vs EBITDA estimate $83.8M*; the beat was driven by Leasing (+8% YoY) and Capital Markets (+11% YoY) strength and expense timing .
  • Guidance essentially maintained: Leasing mid-single-digit growth; Capital Markets to exceed 2024’s mid-single-digit rate; Services now expected to achieve mid-single-digit growth for the full year (earlier than prior timing) .
  • Capital allocation remains balanced: repriced $1.0B term loan (-25 bps), prepaid $25M of 2030 term loan in March; liquidity $1.7B; net leverage ~3.9x; deleveraging continues alongside investments in growth .

What Went Well and What Went Wrong

  • What Went Well

    • Americas Leasing up 14% (third consecutive quarter of double-digit growth) on office and industrial strength; APAC Leasing +16% with Australia and China improving .
    • Capital Markets +11% globally, led by APAC and broad-based improvement as rate stability and better debt liquidity catalyzed activity; APAC +61% YoY .
    • CEO highlighted “mid-single digit organic growth in Services two quarters ahead of target” and >100 bps margin improvement; continued deleveraging and investment for growth (“strong and resilient growth engine”) .

  • What Went Wrong

    • EMEA softness: Leasing -27%; Services -10% with project management reductions; EMEA Adjusted EBITDA fell to $2.0M (down ~78% YoY) .
    • Free cash flow use of $(166.6)M in Q1 due to typical seasonal working-capital outflows (U.S. bonus payments), expected to normalize over the year .
    • Some margin outperformance was helped by expense timing (~30% of the beat), with reversal expected primarily in Q2; EMEA near bottom of cycle with slow recovery .

Financial Results

Consolidated trend (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Total Revenue ($USD Billions)$2.344 $2.630 $2.285
Service Line Fee Revenue ($USD Billions)$1.633 $1.875 $1.541
Adjusted EBITDA ($USD Millions)$142.5 $222.3 $96.2
Adjusted EBITDA Margin (%)8.7% 11.9% 6.2%
GAAP Diluted EPS ($USD)$0.14 $0.48 $0.01
Adjusted Diluted EPS ($USD)$0.23 $0.48 $0.09

Q1 2025 vs Wall Street consensus (S&P Global)

MetricQ1 2025 ActualQ1 2025 Consensus*Surprise
Revenue ($USD Billions)$2.285 $2.237*+$0.048B
Primary EPS ($USD)$0.09 $0.02*+$0.07
EBITDA vs Adj. EBITDA ($USD Millions)Adjusted EBITDA: $96.2 EBITDA: $83.8*+$12.4M

Values with asterisks retrieved from S&P Global.

Service line performance (Q1 YoY)

Service Line Fee Revenue ($USD Millions)Q1 2024Q1 2025YoY Δ
Services$871.2 $866.6 -1% USD; +1% LC
Leasing$381.7 $412.5 +8% USD; +9% LC
Capital Markets$141.6 $157.4 +11% USD; +11% LC
Valuation & Other$103.1 $104.2 +1% USD; +3% LC
Total Service Line Fee Revenue$1,497.6 $1,540.7 +3% USD; +4% LC

Geographic segments (Q1 YoY)

RegionTotal Revenue ($USD Millions) Q1 2024Q1 2025Adjusted EBITDA ($USD Millions) Q1 2024Q1 2025
Americas$1,621.0 $1,688.3 $64.4 $79.3
EMEA$222.4 $205.0 $9.0 $2.0
APAC$341.4 $391.3 $4.7 $14.9

KPIs and balance sheet

KPIQ1 2025
Liquidity ($USD Billions)$1.7
Cash & Cash Equivalents ($USD Millions)$623.2
Net Debt ($USD Billions)$2.4
Free Cash Flow ($USD Millions)$(166.6)
Net Leverage (x)~3.9x EBITDA

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Leasing revenue growthFY 2025Mid-single digits Mid-single digits Maintained
Capital Markets growthFY 2025Accelerate vs 2024 mid-single digits Exceed 2024’s mid-single-digit growth rate Maintained/clarified
Services top-line growthFY 2025Mid-single-digit run rate by midyear Mid-single-digit growth for full year (earlier than prior timing) Raised timing
Q1 marginQ1 2025~Flat YoY Actual +100 bps; ~30% from expense timing; partial reversal expected in Q2 Beat in Q1; forward unchanged
EPS growthFY 2025 / 20262025 EPS growth > 2024 2025 EPS growth > 2024; acceleration in 2026 Maintained
LeverageOngoingDeleveraging; 3.8x at FY24-end ~3.9x; continued deleveraging; no maturities until 2028 Seasonal uptick; strategy unchanged

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
Leasing momentum (office/industrial)4th–5th consecutive growth quarter; office quality bias; RTO tailwinds Americas +14%; APAC +16%; strong demand, longer lease terms (~77 months avg) Positive, durable
Capital Markets recoveryBroadening activity; 20% YoY growth expected in Q4; waterfall/gradual recovery thesis +11% global; APAC strong; clients closing deals; cash buyers active; rates focus on all-in cost Gradual upcycle
Services reaccelerationTarget mid-single-digit in 2025; restructuring EMEA D&B; APAC/FM strong Achieved mid-single-digit organic growth ahead of plan; expect mid-single-digit for full year Improving
Tariffs/macroWatching policy; CRE can navigate changes Minimal impact to date; 90–95% of clients proceeding on timelines; small delays only Manageable
Rates/financingFed cuts supportive; pipelines strengthening Pipeline robust; all-in borrowing costs matter; institutional capital active including cash Supportive
Regional dynamicsAPAC investments paying off; EMEA mixed with lumpiness EMEA at bottom; slow recovery; UK/Netherlands capital markets improving Mixed

Management Commentary

  • CEO: “We drove excellent first quarter results… achieving mid-single digit organic growth in our Services business two quarters ahead of target… realized over 100 basis points of margin improvement while continuing to reduce leverage and invest for growth… we have built a strong and resilient growth engine” .
  • CFO: “Adjusted EBITDA margin expanded 100 basis points versus prior year, beating our first quarter guidance for flat year-over-year margins due primarily to greater-than-expected leasing and services revenue as well as some expense timing benefits” .
  • CEO on capital allocation: “Since I took over as CEO, we have repaid $230 million in debt and have successfully refinanced and repriced our debt 5x, reducing our annual cash interest burden… we are now attacking growth” .
  • CFO on balance sheet: “We completed another repricing of $1 billion of term loan debt, lowering… by 25 bps… paid off a further $25 million in debt due in 2030… $1.7 billion in liquidity; no funded debt maturities until 2028” .

Q&A Highlights

  • Margins: ~30% of Q1 margin beat due to expense timing; reversal expected primarily in Q2; remaining upside depends on Leasing/Capital Markets performance .
  • Tariffs/decision-making: ~90–95% of clients moving forward; ~5% delaying decisions to later in 2025; no freeze in decisions observed .
  • Office in recession scenario: Demand remained strong; longer lease terms (~77 months avg); sensitivity modeled but not materially negative .
  • Industrial leasing and trade policy: Positive trends in Americas in 5 of last 6 quarters; normalization expected but businesses still need space .
  • Rates/capital markets: Focus on all-in borrowing costs and credit spreads; many investors can transact with corporate-level financing or full cash .
  • EMEA: Softness due to tough comps and project management unwind; property management growing; region likely at cycle bottom .
  • Capital allocation: Balance offense (growth investments) and defense (deleveraging) unchanged from February; continued debt paydown alongside recruiting .

Estimates Context

  • Revenue beat: $2.285B actual vs $2.237B consensus* (+~2.1%); driven by Leasing (+8%) and Capital Markets (+11%) .
  • EPS beat: Adjusted diluted EPS $0.09 vs Primary EPS consensus* $0.02; margin expansion and lower interest expense aided results .
  • EBITDA beat: Adjusted EBITDA $96.2M vs EBITDA consensus* $83.8M; operational execution across Leasing/Capital Markets .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Narrative has shifted to execution: organic Services growth ahead of schedule, Leasing strength, and Capital Markets recovery underpinning beats and margin expansion .
  • EMEA is the main drag; expect a slow recovery. Americas/APAC carry growth with strong pipelines; APAC showing outsized Capital Markets/Leasing momentum .
  • Q1 margin beat includes timing benefits; look for partial reversal in Q2 and continued dependence on Brokerage volumes—monitor near-term Leasing/Capital Markets data points .
  • Balance sheet optionality improving: repricings and prepayments reduce cash interest; liquidity robust; no maturities until 2028—supports continued talent investments and tuck-ins .
  • Estimate revisions likely upward for EPS/revenue given outperformance and full-year Services pacing to mid-single-digit; watch EMEA and project management trajectory for downside risk .
  • Trading lens: Positive setup on Brokerage momentum and margin trajectory; near-term catalysts include Q2 commentary on expense reversal magnitude and confirmation of Services growth run-rate .
  • Medium-term thesis: Multi-year CRE upcycle, disciplined capital allocation, and targeted growth investments (talent, data/analytics, Services tuck-ins) support accelerating EPS into 2026 .

Other Relevant Q1 2025 Press Releases

  • Earnings release scheduling: Q1 2025 results were released April 29; call at 9:00 a.m. ET .
  • Term loan repricing: ~$990M repriced in January 2025, rate cut by 25 bps to Term SOFR + 2.75% .

Non-GAAP Adjustments and Notes

  • Adjusted EBITDA excludes items such as unrealized losses, impairment, acquisition-related costs, cost savings initiatives, and portions of unique stock-based comp tied to 2024 awards to improve comparability; margin measured against service line fee revenue .
  • Free cash flow defined as net cash used in operating activities less capex; Q1 seasonal outflow reflects bonus payments .