JONES LANG LASALLE INC (JLL)·Q1 2025 Earnings Summary

Executive Summary

• JLL delivered double-digit top-line growth with revenue of $5.746B (+13% LC) and adjusted diluted EPS of $2.31 (+28% YoY), beating Wall Street consensus on both revenue and EPS; GAAP diluted EPS was $1.14, down due to non-cash equity losses and higher restructuring charges . Q1 consensus: EPS $2.18* vs actual $2.31; revenue $5.487B* vs actual $5.746B (beats) (see Estimates Context).
• Transactional engines accelerated: Leasing up 15% (office +18% YoY), Capital Markets Services up 16% led by debt advisory (+45%+) and U.S. investment sales (+~46%) . Resilient revenues rose 13%, with Workplace Management +15% and Project Management +16% .
• Management maintained FY 2025 adjusted EBITDA guidance at $1.25B–$1.45B, citing strong pipelines but higher macro/policy volatility; investments in AI/data and platform continue, pressuring near-term margins in Real Estate Management Services while positioning for profitable growth .
• Cash flow was seasonally negative (OCF -$767.6M; FCF -$812.1M), Net Debt rose to $1.754B (1.4x TTM adj. EBITDA) due to compensation seasonality and a $100M investment in JLL Income Property Trust; Corporate Liquidity remained robust at $3.312B .

What Went Well and What Went Wrong

What Went Well

• Broad-based growth across segments: Total revenue +13% LC; Leasing +15%; Capital Markets Services +16%; Workplace Management +15%; Project Management +16% .
• Transactional momentum: Debt advisory revenue +45%+, U.S. investment sales +~46% (outpacing U.S. market +42%) .
• Management confidence and platform strategy: “Broad-based revenue growth and the 28% increase in Adjusted EPS…reflect JLL’s multi-year focus on platform differentiation, efficiency and resiliency” — CEO Christian Ulbrich .

What Went Wrong

• GAAP profitability headwinds: Net income -16% YoY and diluted EPS $1.14 (-17% YoY) driven by larger non-cash equity losses ($27.6M vs $4.9M) and higher restructuring/acquisition charges (+$18.0M YoY) .
• Real Estate Management Services margins: Adjusted EBITDA down to $66.3M (-7% YoY) given continued technology/AI and human capital investments and property management integration costs .
• Investment Management softness: AUM fell to $82.3B (q/q -7% USD) and segment revenue -5% YoY; Adjusted EBITDA declined to $15.8M due to lower AUM, FX transaction losses, and timing effects .

Financial Results

Core Financials vs Prior Periods and Estimates

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

Values retrieved from S&P Global.*

Segment Revenues (YoY)

Segment Adjusted EBITDA

KPIs and Balance Sheet

Guidance Changes

No explicit quantitative guidance for revenue, EPS, margins, OpEx, OI&E, tax rate, or segment-level outlook beyond qualitative commentary provided on demand, pipelines, and investment pace .

Earnings Call Themes & Trends

Management Commentary

• “Broad-based revenue growth and the 28% increase in Adjusted EPS…position us well to navigate real estate cycles and continue to deliver superior client outcomes.” — CEO Christian Ulbrich .
• “We are maintaining our full year adjusted EBITDA target range of $1.25 billion to $1.45 billion.” — CFO Karen Brennan .
• “We are the largest debt intermediary in commercial real estate globally…revenue growth exceeded 45% in the first quarter.” — CEO Christian Ulbrich (debt advisory) .
• “U.S. office leasing increased for the fifth consecutive quarter, exceeding first-quarter 2019 levels…large leasing deals increased across nearly all asset classes.” — Segment commentary .

Q&A Highlights

• Macro/tariff uncertainty: Management expects slower decision-making near term; longer-term growth tied to GDP with JLL’s growth historically ~3x GDP; outsourcing drivers (cost, expansion) likely resilient but timing uncertain .
• Real Estate Management Services outlook: Near-term margin pressure from tech/AI and hiring; property management integration carries transitional costs; expect stronger profit/margin in H2 and full-year margin expansion vs 2024 .
• Capital Markets underwriting: Bidding intensity broadly steady; variability in bids rising as buyers adjust assumptions; healthy lending markets support transactions despite uncertainty .
• LaSalle trajectory: AUM pressured by dispositions; fundraising momentum improving ($1.9B in Q1) with dry powder to deploy; expect advisory fee stabilization over time .
• Data center exposure: Active across leasing/capital markets; currently small share of fee revenue but growing with capability build-out .

Estimates Context

• Q1 2025 beats: Adjusted EPS $2.31 vs consensus $2.18*; revenue $5.746B vs consensus $5.487B* (EPS beat ~$0.13; revenue beat ~$0.26B). Primary EPS based on 9 estimates; revenue based on 6 estimates* (see table above).
  Values retrieved from S&P Global.*

• Implications: Estimate revisions likely move higher for Leasing and Capital Markets contributions given outsized transactional performance; Real Estate Management Services margins may temper near-term EPS leverage due to continued platform investments .

Key Takeaways for Investors

• Transactional momentum is strong: Leasing and Capital Markets both delivered double-digit growth; debt advisory and U.S. investment sales outpaced markets, supporting near-term earnings power .
• Resilient backbone: Workplace and Project Management growth (+15% and +16%) underpin revenue stability through cycles; continued platform investments in AI/data should enhance long-term margins and differentiation .
• Profit mix: Adjusted EBITDA rose to $224.8M; breadth of transactional beats offset investments; GAAP EPS pressured by non-cash equity losses and higher restructuring—focus on adjusted metrics for core performance .
• Office recovery is gaining traction: Office leasing +18% YoY; U.S. activity above 2019 levels with improving large-deal flow—supports Leasing Advisory trajectory into H2, barring macro shocks .
• Balance sheet/liquidity solid: Liquidity $3.312B; Net Leverage 1.4x TTM adj. EBITDA; seasonally higher Net Debt should decline as cash conversion improves over the year .
• Watch macro/policy risk: Management flagged tariff/policy-driven decision delays; underwriting variability rising—pipeline strong but deal timing sensitive to rates and macro .
• FY25 guide maintained: Adjusted EBITDA $1.25B–$1.45B maintained; near-term margin pressure in Real Estate Management Services likely, but H2 profit/margin expected stronger vs prior year .