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NEWMARK GROUP, INC. (NMRK)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered strong organic growth: revenue rose 21.8% to $665.5M, Adjusted EPS reached $0.21 (+40% YoY), and Adjusted EBITDA was $89.2M (+40.5% YoY). Both revenue and EPS beat Wall Street consensus; revenue $665.5M vs $606.1M estimate and EPS $0.21 vs $0.186 estimate. Bold beat: revenue and EPS. *
  • Growth was broad-based: Management Services/Servicing +10.5%, Leasing +31.0%, Capital Markets +32.7%, with debt originations and investment sales volume strength and a 62.5% capital markets volume increase.
  • 2025 guidance was maintained (revenue $2.9–$3.1B, Adjusted EPS $1.40–$1.50, Adjusted EBITDA $495–$545M, Adjusted tax rate 14–16%), reflecting macro caution (tariffs/interest-rate volatility) despite robust pipelines.
  • Potential stock catalysts: management indicated Q2 pipelines up ~10% YoY and signaled share repurchases could resume, supported by $371.9M remaining authorization and 1.3x net leverage.

What Went Well and What Went Wrong

What Went Well

  • Broad-based outperformance: “another quarter of double-digit gains across every major business line” and ~22% revenue growth, with ~40% growth in earnings metrics (Adjusted EPS and Adjusted EBITDA).
  • Capital markets leadership: revenues +32.7% with volumes +62.5% and GSE/FHA originations +40%; management highlighted continued market share gains and strong debt-side activity into Q2.
  • Leasing rebound and geographic breadth: leasing fees +31% led by NYC, Boston, and a strong rebound in the San Francisco Bay Area involving AI, financial services, and healthcare.

What Went Wrong

  • GAAP loss persisted: GAAP net loss of $(8.8)M and GAAP EPS of $(0.05), including a notable $21.1M equity-based comp charge tied to the departure of the former Executive Chairman, which depressed GAAP profitability.
  • Expense growth: total GAAP expenses increased 20.1% YoY (compensation +21.7%, non-compensation +10.8%), reflecting higher pass-through costs and growth investments.
  • Cash flow seasonality and investments: operating cash flow excluding loan originations/sales was $(126.4)M; excluding employee loans it was $(8.7)M, as the company funded hires and experienced typical first-quarter working capital movements.

Financial Results

Consolidated Results vs prior periods and estimates

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$546.5 $685.9 $888.3 $665.5
GAAP EPS ($)$(0.09) $0.10 $0.26 $(0.05)
Adjusted EPS ($)$0.15 $0.33 $0.55 $0.21
Adjusted EBITDA ($USD Millions)$63.5 $112.6 $182.9 $89.2
Revenue vs S&P Global Consensus ($USD Millions)———$665.5 vs $606.1 (Beat)*
EPS vs S&P Global Consensus ($)———$0.21 vs $0.186 (Beat)*

*Values retrieved from S&P Global.

Margin snapshot

MetricQ1 2024Q4 2024Q1 2025
Adjusted EBITDA Margin (%)11.6% (Computed from $63.5/$546.5) 20.6% (Computed from $182.9/$888.3) 13.4% (CFO: ~13.4% and computed from $89.2/$665.5)

Segment breakdown (Q1 2025 vs Q1 2024)

Segment ($USD Millions)Q1 2024Q1 2025YoY Change
Fees from Management Services, Servicing, and Other$182.7 $200.0 +9.5%
Pass Through Revenues$74.2 $83.9 +13.1%
Management Services, Servicing, and Other (Total)$256.9 $283.9 +10.5%
Leasing and Other Commissions$158.8 $208.1 +31.0%
Investment Sales$70.8 $92.9 +31.1%
Fees from Commercial Mortgage Origination, net$43.8 $59.3 +35.3%
OMSR Revenues$16.1 $21.4 +32.6%
Capital Markets (Total)$130.8 $173.5 +32.7%
Total Revenues$546.5 $665.5 +21.8%

KPIs and Balance Sheet

KPIQ4 2024Q1 2025
Cash and Cash Equivalents ($USD Millions)$197.7 $157.1
Total Corporate Debt ($USD Millions)$670.7 $770.9
Total Equity ($USD Millions)$1,538.1 $1,559.9
Net Leverage (x, TTM Adj. EBITDA basis)1.1x 1.3x
Adjusted Earnings Diluted Share Count (mm)255.2 255.3
Dividend per Share ($)$0.03 (declared Feb 13, 2025) $0.03 (declared Apr 29, 2025)
Share Repurchase Authorization Remaining ($USD Millions)$371.9 $371.9

Guidance Changes

MetricPeriodPrevious Guidance (Q4 2024)Current Guidance (Q1 2025)Change
Total Revenues ($USD Billions)FY 2025$2.90–$3.10 $2.90–$3.10 Maintained
Adjusted EPS ($)FY 2025$1.40–$1.50 $1.40–$1.50 Maintained
Adjusted EBITDA ($USD Millions)FY 2025$495–$545 $495–$545 Maintained
Adjusted Earnings Tax Rate (%)FY 202514–16 14–16 Maintained
Dividend per Share ($)Quarterly$0.03 $0.03 Maintained

Management reiterated macro sensitivity (tariffs and rate volatility) behind the decision to hold guidance, while citing strengthening pipelines and recurring revenue visibility.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
AI/data centers & industrialQ4 2024: record $9.2B industrial volumes; advised on large data center financings (Stargate, Texas); outpaced industry in capital markets. Continued strong capital markets activity; market share gains, strong debt-side momentum into Q2. Positive momentum sustained
Macro: tariffs & ratesQ3 2024: Outlook raised amid improved macro/monetary environment; noted rate backdrop. Guidance maintained due to tariffs/interest-rate uncertainty despite robust pipelines. Cautious tone
Regional leasingQ3/Q4: improving office/retail leasing; bullish retail/industrial; expanding in Europe. Leasing strength in NYC, Boston; SF Bay Area rebound with AI/FS/healthcare deals. Improving in key markets
Recurring revenue (Management & Servicing)Q3/Q4: multi-quarter double-digit growth; target $2B within ~5 years. +10.5% YoY; strong Valuation & Advisory; expanding outsourcing/staffing and admin/accounting services. Structural growth continues
Capital returns (buybacks)Q3/Q4: authorization increased to $400M; repurchases in 2024. CFO “comfortable” resuming buybacks given clean balance sheet and 1.3x net leverage. Likely to resume
M&A vs lift-outsPrior: disciplined bolt-ons and talent acquisition strategy; record lift-outs. Preference for organic growth and selective bolt-ons; nimble approach to platform build-out. Consistent approach
Multifamily & GSE/FHAPrior: volumes strong; industry originations rising. Demand robust; FHFA stance supportive; no foreseeable privatization impact through 2026–27. Supportive backdrop

Management Commentary

  • CEO: “We are pleased to report another successful quarter… exceptional talent and industry-leading insight led to a 22% increase in revenues, reflecting another quarter of double-digit gains across every major business line… We anticipate further market share gains over time… potential geopolitical headwinds may have a dampening effect on industry activity.”
  • CFO: “Adjusted EPS increased 40% to $0.21… Adjusted EBITDA was $89.2M, up 40.5%… our adjusted EBITDA margin improved by approximately 180 basis points to 13.4%… cash $157.1M and 1.3x net leverage… buybacks a prudent allocation; anticipate further share repurchases.”
  • CEO on leasing/capital markets: “Leasing fees were up 31%… strong rebound in the San Francisco Bay Area… Capital Markets revenues grew 32.7%, outpacing the industry.”

Q&A Highlights

  • Macro vs pipeline: Management is seeing deals and leases continue to close; CMBS slower, banks bridging some gaps. Macro uncertainty acknowledged, but no material pullback observed yet.
  • Buybacks: CFO expressed comfort with resuming buybacks given clean balance sheet and low net leverage; did not repurchase in Q1 due to growth investments but expects to pivot in Q2.
  • Management Services differentiation: Emphasis on managed services, staffing, fund administration and property accounting; sticky, value-added offerings deepen investor partnerships.
  • Guidance stance: Chose to maintain annual guidance due to macro volatility despite strong start; Q2 pipelines up ~10% YoY; recurring revenues provide back-half visibility.
  • Multifamily/GSE outlook: Demand remains strong; FHFA/GSEs supportive of housing; no near-term privatization impact expected.
  • Recruiting competitive landscape: Newmark continues to attract talent, focusing on high revenue per capita and targeted white space expansion, including rapid traction in Germany.

Estimates Context

  • Q1 2025 consensus vs actual: revenue $606.1M estimate vs $665.5M actual (Beat); EPS $0.186 estimate vs $0.21 actual (Beat). Bold beat. *
  • Coverage depth: EPS estimates count 5; revenue estimates count 4. [GetEstimates]*
  • Note: Consensus “EBITDA” metrics may not be directly comparable to company-reported Adjusted EBITDA; we benchmark results primarily to revenue and EPS where coverage is deeper.*

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • NMRK executed a broad-based revenue acceleration with clear share gains in capital markets and strength in leasing, delivering a revenue and EPS beat vs consensus—strong near-term positive for sentiment. *
  • Adjusted EBITDA margin improved to ~13.4% and should benefit as transaction activity normalizes and recurring businesses scale, though GAAP results are currently impacted by non-recurring equity comp.
  • Q2 pipelines up ~10% YoY and debt-side momentum remain constructive; guidance held due to macro (tariffs/rates), implying potential upside if volatility subsides.
  • Balance sheet is positioned for capital returns (1.3x net leverage, $371.9M authorization); CFO signaled buybacks likely to resume—an incremental near-term catalyst.
  • Recurring revenue mix continues to rise, enhancing visibility and resilience; strategic expansion in management services/staffing/admin augments durability of earnings.
  • Watch SF Bay Area and key hubs (NYC, Boston) where leasing strength and AI/data center activity are tailwinds; continued deal flow supports capital markets trends.
  • Risk monitor: macro headline risk (tariffs, rates) and seasonal cash flow dynamics; keep focus on expense trajectory and any further non-recurring GAAP adjustments.

Notes: All document-based data points and quotes cited to SEC 8-K filings and the Q1 2025 call transcript; S&P Global consensus figures marked with asterisk and retrieved from S&P Global. *

*Values retrieved from S&P Global.