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JONES LANG LASALLE INC (JLL)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered double-digit top-line growth and a material bottom-line beat: revenue $6,510.4M (+11% YoY LC +10%) and adjusted EPS $4.50 (+29% YoY), with Capital Markets (+23%) and Leasing (+7%) accelerating; GAAP diluted EPS was $4.61 (+45% YoY) .
  • Results modestly topped Wall Street: adjusted EPS $4.50 vs $4.27 consensus*, revenue $6,510.4M vs $6,486.2M consensus*; EBITDA tracked in-line-to-better vs S&P consensus depending on basis ($347.3M adjusted EBITDA vs $346.8M consensus*) .
  • Guidance raised: management increased the low end of FY25 Adjusted EBITDA range by $75M to $1,375–$1,450M; on track to achieve the low end of mid‑term adjusted EBITDA margin target first outlined in 2022 .
  • Strong cash generation and de‑leveraging: Q3 free cash flow $567.6M; net debt fell to $1,098.6M; net leverage improved to 0.8x; buybacks increased to $70.0M in Q3 .
  • Stock reaction catalyst: raising FY25 Adjusted EBITDA range and visible recovery in transaction markets (debt advisory, investment sales, office leasing outperformance) set a constructive tone into Q4 and FY25 exit .

What Went Well and What Went Wrong

What Went Well

  • Transactional reacceleration: Capital Markets Services revenue +23% YoY (ex‑MSR, +27%), with strength across multifamily and retail; adjusted EBITDA +37% YoY despite loan-related losses .
  • Office leasing outperformance: global office leasing revenue +14% vs market volumes +2%; U.S. office revenue +14% vs volumes +4% (JLL Research), contributing to Leasing Advisory revenue +7% .
  • Free cash flow and leverage: Q3 FCF $567.6M; net leverage down to 0.8x; corporate liquidity $3,542.9M; buybacks ramped to $70.0M (YTD $131.2M) .
  • Management quote: “We anticipate momentum continuing into the fourth quarter and are raising the mid-point of our full year Adjusted EBITDA target… data, technology and AI capabilities… position us well to deepen client relationships and drive long-term profitable growth.” — CEO Christian Ulbrich .

What Went Wrong

  • Loan-related losses: $7.2M incremental expense tied to loan loss reserves and finalized loss-sharing on prior issues in Capital Markets dented segment margins .
  • Property Management churn: intentional exits of low-margin contracts (primarily APAC) dampened growth; this process expected to continue through H1 next year before returning to a more positive trajectory .
  • Incentive comp timing and discrete items: year-over-year phasing of accruals constrained incremental margins in Leasing Advisory and REMS despite revenue growth .

Financial Results

Consolidated Results vs Prior Periods and Estimates

MetricQ1 2025Q2 2025Q3 2025YoY (Q3)QoQ (Q3 vs Q2)Q3 2025 Consensus*Beat/Miss
Revenue ($USD Millions)$5,746.4 $6,250.1 $6,510.4 +11% LC, +10% USD +4.2%$6,486.2*Beat
Diluted EPS (GAAP, $)$1.14 $2.32 $4.61 +45% +98.7%n/an/a
Adjusted Diluted EPS ($)$2.31 $3.30 $4.50 +29% +36.4%$4.27*Beat
Adjusted EBITDA ($USD Millions)$224.8 $291.7 $347.3 +16% LC, +17% USD +19.1%$346.8*In-line/Beat

Values with asterisk retrieved from S&P Global.

Margin Trajectory

MetricQ1 2025Q2 2025Q3 2025
EBITDA Margin %4.15%*5.03%*5.76%*
EBIT Margin %2.43%*3.50%*4.38%*
Net Income Margin %0.96%*1.80%*3.42%*

Values with asterisk retrieved from S&P Global.

Segment Revenue and Profit

SegmentQ3 2024 Revenue ($MM)Q3 2025 Revenue ($MM)YoY LC ChangeQ3 2025 Adj. EBITDA ($MM)
Real Estate Management Services$4,520.5 $4,982.4 +10% $102.2
Leasing Advisory$691.5 $741.9 +7% $136.9
Capital Markets Services$498.8 $612.1 +22% $89.9
Investment Management$101.3 $115.4 +12% $23.7
Software & Technology Solutions$56.7 $58.6 +3% $(1.1)

Selected KPIs

KPIQ2 2025Q3 2025
Free Cash Flow ($MM, quarterly)$288.4 $567.6
Net Debt ($MM)$1,586.7 $1,098.6
Net Leverage (x)1.2x 0.8x
Corporate Liquidity ($MM)$3,321.4 $3,542.9
Share Repurchases ($MM, quarterly)$41.4 $70.0
AUM ($B)$84.9 $88.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($MM)FY 2025$1,300–$1,450 (implied from +$75M low-end increase) $1,375–$1,450 Raised low-end by $75M
Adjusted EBITDA Margin (mid-term target)Multi‑year16–19% (as referenced in 2022 target) On track to achieve low end in FY25 Maintained; progress affirmed
Share RepurchasesFY 2025Offset annual stock comp dilution Intend to at least offset annual stock comp dilution; opportunistic based on environment, valuation, leverage Maintained/clarified
REMS Property Management growthH1 next yearHigh single-digit to low double-digit (Work Dynamics historical), PM impact minor Near-term moderation with intentional churn through H1; growth returns in H2 Tempered near term trajectory

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesQ1: Continued investments in AI and tech; platform leverage aiding margins . Q2: Cost discipline partially enabled by tech/shared services; Software & Tech Solutions improving adj. EBITDA via carried interest .CEO: “AI forward” approach; 41% daily internal AI tool usage; building agentic AI; integrating Software & Tech Solutions into REMS effective Jan 1 to scale synergies; path to segment profitability in FY26 .Accelerating adoption and deeper integration; clearer path to profitability.
Capital Markets recoveryQ1: Debt advisory +45% YoY; U.S. investment sales +46% outpacing market . Q2: Debt advisory +47% and investment sales +22% on tougher comps; margin improved .Momentum sustained; broad-based sector/geographic strength; pipeline robust; steady recovery (no “hockey stick”) .Improving steadily; market liquidity/fundraising rising.
Leasing/Office demandQ1: Global office leasing +18% vs market +9%; U.S. office up; industrial momentum . Q2: Leasing +5%; U.S. industrial strength; office deal size up .Leasing +7%; global office revenue +14% vs volumes +2%; U.S. outperformance; healthy Q4 pipeline .Strengthening in office; pipeline supportive.
Property Management/REMSQ1: REMS +12%; investments weighed on margin . Q2: REMS +12%; strong Workplace/Project Mgmt .Intentional exit of low-margin PM contracts (APAC) moderates near-term growth; margin outlook improving; process to continue through H1 .Near-term moderation; margin focus; recovery in H2.
AUM/ValuationsQ2: AUM increased to $84.9B; capital raised $2.9B YTD .AUM rose to $88.5B; modest valuation increases indicate bottoming; $3.4B private equity capital raised YTD .Bottoming valuations; gradual advisory fee recovery expected.
Cross-border capital/macroQ2: Mixed indicators, constructive backdrop .Increased overseas interest in U.S.; Europe lagging; U.S. relative attractiveness improving .Positive for U.S. flows.

Management Commentary

  • Strategy and guidance: “We anticipate momentum continuing into the fourth quarter and are raising the mid-point of our full year Adjusted EBITDA target… close alignment between our data, technology and AI capabilities with our core businesses position us well…” — CEO Christian Ulbrich .
  • Capital allocation: “We intend to continue to at least offset annual stock compensation dilution with total repurchase amount, depending on operating environment, M&A, valuation and leverage outlook” — CFO Kelly Howe .
  • Segment realignment: “Effective January 1, Software and Technology Solutions will run as a fifth business line within REMS… further scale… top and bottom line synergies” — CEO Christian Ulbrich .
  • Margin targets: “We are on track to achieve the lower end of those margin targets we had put out in 2022” — CFO Kelly Howe .

Q&A Highlights

  • Property Management churn: Management emphasized intentional exits from low-margin contracts (primarily APAC) to drive margin; process continues through H1 next year; U.S. PM growth mid-single digit .
  • Free cash flow and buybacks: With leverage at 0.8x, buybacks ramped in Q3; absent compelling M&A, repurchases seen as attractive use of cash .
  • AI impact: Near-term benefits skew to efficiency/productivity across shared services and front-office tools; notable productivity gains in Capital Markets .
  • Capital Markets pipeline: Steady, non‑hockey‑stick recovery; highly liquid markets and improving bidder dynamics underpin Q4 and forward outlook .
  • AUM/valuations: Modest valuation increases suggest CRE values may have bottomed; strong equity raise in Q3 supports AUM growth over coming quarters .

Estimates Context

  • Adjusted EPS: $4.50 actual vs $4.27 consensus* — beat .
  • Revenue: $6,510.4M actual vs $6,486.2M consensus* — beat .
  • EBITDA: S&P Global consensus $346.8M*; company reported Adjusted EBITDA $347.3M; S&P also shows an “actual” EBITDA $375.0M*, reflecting differing EBITDA definitions (S&P normalized vs company adjusted); directionally in-line to slight beat versus consensus baseline .
    Values retrieved from S&P Global.

Where estimates may adjust: upward revision bias in Transactional lines (Capital Markets, Leasing) given accelerating pipelines and execution; REMS near-term growth moderated by PM churn but margin trajectory intact; full-year Adjusted EBITDA range raised .

Key Takeaways for Investors

  • Momentum broadening: Transactional engines (debt advisory, investment sales, office leasing) are accelerating, supporting revenue and margin expansion into Q4 .
  • Guidance raised: FY25 Adjusted EBITDA range lifted to $1,375–$1,450M; mid‑term margin low end achievable in FY25 — a key catalyst for sentiment and multiple support .
  • Cash discipline: Strong Q3 FCF ($567.6M) and lower net leverage (0.8x) enable incremental buybacks; expect repurchases to at least offset stock comp dilution .
  • Quality over quantity in PM: Contract exits temper REMS growth near-term but enhance margin profile; look for inflection in H2 next year .
  • AI/tech integration: Deeper embedding of agentic AI and tools across workflows; integration of Tech Solutions into REMS should unlock revenue and cost synergies; path to segment profitability by FY26 .
  • Watch loan-loss dynamics: Loan-related losses are being worked through; reserves can be volatile; majority of recent charges related to previously disclosed fraud instances, not broad deterioration .
  • Trading setup: Into seasonally strong Q4, the combination of raised guidance, transaction market recovery, and operating leverage supports near-term upside; PM churn and discrete items are known overhangs but manageable per commentary .

Values retrieved from S&P Global where marked with *.