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NEWMARK GROUP, INC. (NMRK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue of $759.1M and Adjusted EPS of $0.31, with strong organic growth across all major lines; management raised FY 2025 revenue and earnings guidance on a robust pipeline .
  • Revenue and EPS beat Street: revenue $759.1M vs consensus $691.4M*, and Adjusted EPS $0.31 vs $0.265*; Street EBITDA consensus $101.0M* vs company-reported Adjusted EBITDA $114.0M (non-GAAP), reflecting differences in definition .
  • Capital Markets revenue up 37.9% YoY, Leasing up 13.8%, and Management Services up 13.6%; net leverage 1.4x and cash $195.8M support growth and capital allocation flexibility .
  • FY 2025 guidance raised: revenues $3.05–$3.25B (prior $2.90–$3.10B), Adjusted EPS $1.47–$1.57 (prior $1.40–$1.50), Adjusted EBITDA $523–$573M (prior $495–$545M); dividend maintained at $0.03 .

Values with asterisk (*) are from S&P Global – consensus estimates retrieved via GetEstimates.

What Went Well and What Went Wrong

What Went Well

  • Company-wide strength: “Newmark delivered strong revenue and earnings growth… Adjusted EPS increased by 41 percent,” with double-digit gains across every major business line .
  • Capital Markets leadership: revenues up 37.9% YoY; total debt volumes +135% and investment sales +26%, outpacing industry originations (+38%) and sales (+~11%) .
  • Raised outlook: “We are raising our full year outlook… Adjusted EPS $1.47–$1.57, representing a 20% to 28% year-over-year increase,” underscoring confidence in the pipeline .

What Went Wrong

  • Equity-based compensation surged: +136% YoY in Q2 (to $60.1M), driven by exchangeability charges and earlier unit redemptions; expected slightly above long-term 7–9% of commission revenues in 2025 .
  • GAAP operating cash flow negative due to loan origination funding flows: net cash from operations was $(379.7)M, though Adjusted Free Cash Flow improved to $95.9M .
  • Higher pass-through and other costs: Non-compensation expenses rose (GAAP +3.1% YoY) with pass-through and growth-related items, partly offset by revenue improvements .

Financial Results

Consolidated Performance vs prior periods and estimates

MetricQ2 2024Q1 2025Q2 2025Street Consensus (Q2 2025)
Total Revenues ($USD Millions)$633.375 $665.494 $759.112 $691.379*
GAAP Diluted EPS ($)$0.08 $(0.05) $0.11 N/A
Adjusted EPS ($)$0.22 $0.21 $0.31 $0.265*
Adjusted EBITDA ($USD Millions)$86.272 $89.202 $113.964 $101.0*
Adjusted EBITDA Margin (%)13.6% 13.4% 15.0% N/A

Values with asterisk (*) are from S&P Global – consensus estimates retrieved via GetEstimates.

Segment Revenues

Segment ($USD Millions)Q2 2024Q2 2025YoY Change
Management Services, Servicing Fees & Other$262.8 $298.4 +13.6%
Leasing & Other Commissions$208.6 $237.3 +13.8%
Capital Markets (incl. OMSR)$162.0 $223.5 +37.9%
Total Revenues$633.4 $759.1 +19.9%

KPIs and Balance Sheet

KPIQ2 2025Prior Reference
Cash & Cash Equivalents ($M)$195.8 $197.7 (Dec 31, 2024)
Total Corporate Debt ($M)$871.2 $670.7 (Dec 31, 2024)
Net Leverage (x TTM AEBITDA)1.4x 1.1x (FY 2024)
Dividend per share ($)$0.03 (declared July 29, 2025; payable Aug 29, 2025) $0.03 (prior quarterly)
Fully diluted weighted-average shares (GAAP, M)252.6 176.4 (Q1 GAAP anti-dilutive)
Adjusted Free Cash Flow ($M)$95.9 (Q2) $103.0 TTM 2Q24; $228.0 TTM 2Q25
Servicing Portfolio$182.0B total; primary servicing $69.6B; WA maturity 5.3 years N/A

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenues ($M)FY 2025$2,900–$3,100 $3,050–$3,250 Raised
Adjusted EPS ($)FY 2025$1.40–$1.50 $1.47–$1.57 Raised
Adjusted EBITDA ($M)FY 2025$495–$545 $523–$573 Raised
Adjusted Earnings Tax Rate (%)FY 202514–16% 14–16% Maintained
DividendQuarterly$0.03 $0.03 Maintained

Notes: Guidance excludes proceeds from the settlement agreement and assumes no material acquisitions or meaningful changes in stock price vs July 29, 2025 close .

Earnings Call Themes & Trends

TopicQ4 2024 (prev)Q1 2025 (prev)Q2 2025 (current)Trend
AI/Data Centers & Digital Infrastructure“Close to $17B in data centers last year; strong runway with AI/CHIPS reshoring” Continued market share gains; strong capital markets volumes Center of excellence; significant runway across equity/finance; management-side opportunities; Europe/Asia expansion Strengthening focus; expanding scope
International Expansion (UK/France/Germany/Asia)U.K. up ~50% YoY; margins expected equal or better; building Europe Building capabilities and geographies Germany launch; ~70 brokers signed; broader integrated services across regions Scaling, positive momentum
Leasing Trends (SF/NYC)Office leasing double-digit growth; improving fundamentals NYC/Boston strong; SF rebound noted SF/Bay Area “opened up,” AI and broader tech activity; gateway strength Improving demand in gateways
Capital Allocation (Buybacks vs M&A)~$225M FY24 buybacks; continued flexibility Expect buybacks in Q2 Pivot to M&A in H2; buybacks still on table; stock seen undervalued Shifting toward growth M&A
Free Cash Flow Disclosure~98% EBITDA conversion in Q4’24; strong cash generation Introduced AFCF framework AFCF emphasized; TTM AFCF $228M (+121% YoY) Enhanced disclosure; improving AFCF
Macro/Tariffs/PolicyAnticipate stabilization; large debt maturities to drive activity Cautious on macro/tariffs; pipelines up ~10% into Q2 Pipelines remain strong; watch macro; NYC mayoral race impact minimal Cautious optimism
Banks/Loan Portfolio SalesCRE overweight likely trickles out over 5 years; private credit gaining N/AN/A in Q2 callStructural tailwind

Management Commentary

  • CEO: “Newmark delivered strong revenue and earnings growth… Adjusted EPS increased by 41 percent… we are raising our full year outlook” .
  • CFO: “Revenue growth of 19.9% and adjusted EPS improvement of 40.9%… Adjusted EBITDA margin improved by 139 bps to 15%… net leverage 1.4x” .
  • On SF/Bay Area leasing: “There is activity coming from every direction… AI and other tech companies are growing… an ecosystem where a company is born every five minutes” .
  • On data centers: “Center of excellence… enormous runway… strong in equity and finance; opportunities in project and facilities management” .

Q&A Highlights

  • Capital allocation: Expect pivot to M&A in H2; buybacks remain an option; stock viewed as undervalued given AFCF yield vs peers .
  • Data center strategy: Focused staffing; broad digital infrastructure exposure (powered land, equity/finance, chips); runway across Europe/Asia .
  • Pipeline visibility: Strong and growing; no notable slowdown through Q2; potential macro variability acknowledged .
  • Segment growth outlook H2: Management & Leasing high-single to low-double digits; Capital Markets mid-to-high teens, with potential upside if macro holds .
  • NYC politics: Limited expected impact; city resiliency emphasized .

Estimates Context

  • Q2 2025 beats: Revenue $759.1M vs $691.4M*; Adjusted EPS $0.31 vs $0.265*; Street EBITDA $101.0M* vs company’s Adjusted EBITDA $114.0M, reflecting non-GAAP adjustments (OMSR/MSR, equity comp, etc.) .
  • FY 2025 Street vs guidance: Primary EPS consensus $1.59* vs company $1.47–$1.57 (guidance slightly below Street mean); Revenue consensus $3.28B* vs guidance $3.05–$3.25B (in range) .

Values with asterisk (*) are from S&P Global – consensus estimates retrieved via GetEstimates.

Key Takeaways for Investors

  • Strong beat-and-raise quarter anchored by Capital Markets and Leasing; margin expansion to 15.0% shows operating leverage .
  • Guidance now implies mid-teens EPS growth in FY 2025 and continued margin progress; watch for 2026 targets ($630M AEBITDA, $1.75 Adjusted EPS) reaffirmed in calls .
  • Data centers/AI remain a structural driver across investment sales, debt placement, and emerging management services; pipeline supportive of continued share gains .
  • Equity-based comp elevated in 2025 on discrete items; management expects normalization toward long-term bands beyond current year .
  • Balance sheet capacity intact (1.4x net leverage; $195.8M cash) to fund growth M&A and talent hires while sustaining buybacks/dividends .
  • Near-term trading: positive setup on raised guidance and beat vs Street; monitor macro (rates/tariffs) and SF/NYC leasing trajectory highlighted by management .
  • Medium-term thesis: recurring businesses (servicing, management, V&A) expanding; AFCF disclosure improving comparability; international build-out offers incremental earnings power .