NMRK - Earnings call transcript Q3 2021

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Operator

Hello, everyone, and welcome to Newmark's Third Quarter 2021 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to turn the call over to Jason McGruder from -- the Interim Head of Investor Relations. Thank you, and please go ahead.

Jason McGruder

Hi. now. head permanent actually I'm Thank you, good morning. and

issued and a third XXXX [Technical quarter release press results financial presentation Newmark Difficulty]. its summarizing results the

Operator

our It lost we My we them. speakers. with reconnect everyone. as Please apologies, standby appears connection have

Jason McGruder

refer to cash and as on otherwise originations and [Technical on net EBITDA with sections how, and stated, as loan for the of definition to the of excluding any our why the adjusted of and press XXXX non-GAAP today's the to exclude when based items XXXX NASDAQ which figures adjusted today's Event. and sales, by Difficulty] a flow methodology, uses corresponding Equity the provided well see include GAAP any them. discussed the updated and reconciliations operating non-GAAP impact for Please results terms impact call from earnings management operations current Event. cash complete release Equity respect Unless activities, term, in these

with statements. in respect on our Additional assumes acquisitions, on available are the historical or call non-GAAP the on tables Act today's XXXX, involve of supplemental as including the company's of expected. Excel Except not of liquidity as the discussed political Any from amended. XXA information within on uncertainties. are by impact Act to pandemic and as actual results, remind on to regarding currently of price. in Securities include outlook, possibly what the also risks are obligation undertakes quarterly expectations risks changes COVID-XX may forward-looking other our statements no materially Section about These on differ share and is to XXXX, that facts may of statements and statements COVID-XX change company's and this stock constitute statements, mentioned various to law, material subject amended, the outlook are that the subject the and information Newmark and meaningful position, call you results factors, meaning These forward-looking business call business website that based is Securities macroeconomic, Such financial social, forward-looking which pandemic. Section presentation. any and XXE of today's effects Exchange our no the GAAP financial the repurchases results the required update I

XX-Q Newmark's risks of actual a For but filings, and in of contained results which Form Officer Exchange Form Inc. including call Commission the forth those X-K Form our additional Gosin, limited from Barry now to cause Group, happy Newmark filings. not recent our see most discussion or to risk Securities could XX-K, uncertainties in forward-looking differ over Executive I'm factors Chief and the set statements, to to host, turn

Barry Gosin

Third you for Revenue XXXX Officer, Rispoli; With and thank Strategy Good Conference Jason. Chief you, Lou us our our for Chief Thank Financial today me Call. morning, Officer, Quarter Mike Newmark's Day; Alvarado. joining and Jeff are Officer, Chief Newmark's

organic ever our producing as commercial quarter industrial, our life science, Virtually and we earnings. Newmark of rapid record was quarterly its from growth, services. across all best growth brokerage and continued investments management benefited our revenues mortgage third multifamily,

classes that culture professionals win lines. platform share collaborative Our created and continues all across a to and market world-class asset have service

by an in Newmark's quarterly in capital revenue all-time led markets increase growth XXX% was a high.

and the quarter. brokerage billion $XX multifamily were originations in Newmark's investment a sales, record mortgage

in debt investment gain both sales We placement. continue market to share and

capture both volumes from and volumes Our debt industry. continue were market other outperforming we by XXX% as were and leasing Fees investment the placement XXX%, our commissions increased and sales up XXX%, to up share. origination by

types, demand stronger industrial major all much led across multifamily, property from benefited by and revenues overall Our office.

of and services, fees $XXX all-time XX% high to quarterly grew Our by an other revenues management servicing million. recurring

our of We over expect these time. revenues businesses as percentage to a grow

our of locations expansion in a plan, global Europe. over with workspace acquired XX we part flexible As leading provider Deskeo,

Hong Dubai. business also and service corporate Singapore Kong, markets and capital expanded our We in

Newmark our our now for XXXX. over to fourth currently in we operates and strong quarter XX year raised guidance have pipeline, the quarter full third countries. our Due record results

debt. Newmark has happy turn and position We to anticipate our Mike. that, EBITDA. acquire goal no organically we leveraging debt towards financial strategically million grow in our adjusted XXXX over call the -- With to to net strong as $XXX drive I'm of

Michael Rispoli

and Thank you, good Barry, morning.

Newmark generated $XXX.X revenues up quarterly million, record of XX.X%.

million quarterly $X.XX a to to with up XXX.X% up EPS was to EBITDA $XXX.X million. $XX compared record adjusted XXX.X% Our of compared was $X.XX.

comparison were adjusted up and In to compared last XX.X%, to XX.X% the EBITDA to of XX.X% margin as total quarter respectively. and XX.X% third year. XXXX, revenues Our improved EBITDA adjusted

Turning to based on an variable compensation increase million, commission-based related million up to $XX.X of $XXX.X higher expenses. expenses. and was were And Total million in growth was operational business support XX.X% which $XXX pass-through to due expenses expenses activity. revenues. increased in

million XX.X for stock treasury $XX.XX. During units an because impacted previously by compensation we $XX.XX, method. for using share which at shares X.X offset shares RSUs appreciation, partially was of shares the related issuance stock quarter, and issued repurchased Newmark's This of increase and ordinary million and the year-to-date, X.X million accounted

Our diluted share XX fully million was count year-over-year. down million, XXX.X

of liquidity, the Moving $X.X net no of and than quarter total debt. We to $XXX.X ended sheet. more the balance equity with third billion million

to to credit continued facility million undrawn position, ample us generation maintain growth, metrics. flow in and cash credit shareholders investment-grade strong means our our with return Our $XXX invest financial provide and capital

to Moving guidance.

share to increased market strong reflect our have continued for our outlook and We pipeline gains. XXXX

adjusted $XXX to For XXXX. to XXXX, to and XXX% the the up XX% we XXX% compared $XXX XX%, to midpoint compared of billion revenues up between million, full XXXX and up at billion, expect year million $X.XX and to $X.X XX% EBITDA

million adjusted earnings open and within mentioned, now plan is the our capital. growth by we XXXX, historical believe to Operator, $XXX would the company achieve questions. which available of Barry of our As EBITDA like well for we reach, given is call to

Operator

[Operator Instructions].

Bruyette, Keefe, ensure Rahmani & from from line Woods. Our locally. Jade Jade, are first open. Please unmuted your question comes you

question, second our to on Coffey Wedbush. from move Henry will We

Henry Coffey

a solid beat. on Congratulations

Looking they Is February. Manhattan York commercial market, in New there just back space, going tell large anything can or rental comparable you major in anecdotally, rents I that cities? were office at from on either Manhattan in absolutely snapped the other where

Luis Alvarado

is pickup as people this saw Look, Alvarado. recovery activity. making across some Primarily, this markets, and finally in by commitments the we're by seeing really you driven the really Lou making all Henry, is decisions to space. being

the than is up volume making lot growth science and back driven Although XXXX in volume gateway of the that in still tell by of not things share is the which to have cities, those But some January We market what's would levels. market driven we in I been we've certainly, it historically we're pick people you will a happen by to markets life to office in is changes back our to had believe the grow. that believe more industrial, office. down which going continue the up significant revenues as go to office, continue is that will these a and share, as in the our improve, where

office. to recent to very we're January, optimistic how as what specifically we're a the little guidance return So as office with return with more saw gives pleased you and has release people will the that to OSHA the and about the in happened, the

Operator

O'Shaughnessy from from Our next Raymond comes James. question Patrick

Patrick O'Shaughnessy

expansion guys you think impact facilities into time? talk have management. announced hires obviously margin and Newmark's you property profile push over key that's do Can of more to and So, you what about global some and some on kind going foreshadowed

Michael Rispoli

Mike. Patrick, Sure. it's

continue year margins to points is So XX this expand on it'll I time. to on ability over basis, to think revenue think expand what basis over can probably depend seeing to expand about expect margins we XXX XXXX. feel good fee we to time. mix, we as but you're a And our pretty we those margins that our Obviously, compared

Patrick O'Shaughnessy

it. Got

your And still robust. the at as end third of then liquidity the Okay. we look pretty at quarter,

on You the good still thinking balance How deploying think of M&A potential repurchases, you other between are shares uses? liquidity hires, a about chunk that sheet. your have I and NASDAQ

Michael Rispoli

-- Well, the and business, to stock think we'll we've shares in doing. for lot the we quarter, there. then a opportunity buy still lot I of is of upside into a we fourth third which that continued quarter. trading, think to the to been there's back the in I there's it's seen room And you've invest where Particularly think think continue do we

saw the continue did in there's We'll still We white U.S. lot to the things in all as some space across quarter. You think our of internationally business well business look we lines. grow globally a as to the

invest the we'll back So continue to business. into

Patrick O'Shaughnessy

front? in be would more to to relatively would follow invest potentially to business and you aggressive aggressive on inclined the the on as quarters? be opposed last expect up some couple think pretty by repurchases acquisitions of of pace the hiring the To repurchase pretty you Or still you'd that,

Barry Gosin

both. do could we think I

for have said have the have the We built an -- to we quarter, significant and as scale. gearing last opportunity in we foundation

infrastructure, terms benefit an respect lots We of get have to white really increased share, but the in markets not are that and of to margin in us of space offering enough growth. market mature

to lots margin. capital to places So we of while opportunities use and smartly our lots maintaining have grow of

have seeing a reach who we're excited space and bit created as amount which expansion. that very We company, in enormous be we've quite runway in we've global an also of a people And around a white want out up. of the of part we're on opened what now participant the globe, to and about

Michael Rispoli

to addition to $X would $XXX we continue last point $XXX of from time. the to available the to have million today, capital that we of and year, number in generate billion is than business cash us flow the add grow to And Yes. over every that more expect we $X billion, I to million

Patrick O'Shaughnessy

And last there that the a and some maybe Got about the shield. forward was rate me. of pulling it. of then impact from Terrific. quarter, Last tax conversation tax question one

think the adjusted or well? be as tax number XX%. I that to right rate the was around using Is going this forward quarter, non-GAAP

Michael Rispoli

as on basis, should XX% that we a be year a we think this on Patrick, full year neighborhood, and in ahead. around somewhere both I basis look go-forward

Operator

We the have Woods. on from Jade & line Bruyette, Keefe, back Rahmani

Jade Rahmani

Thank you much. very

and you next what market something to new XX% for I assume GSE those around reasonable overall, kind estimates something capital its are leasing, rates market the market for X% gains growth We're think outgrow to for in markets, range. would the thinking of the year For is And late. sales, investment share and XX% reasonable do of XX% given multifamily leasing?

Barry Gosin

rate how growth demand pent-up back will determine come is. office. they're to the settles it the hard What are what secure tell going exactly -- once and in people there's you, office to out seeing the attract Companies I we're leasing to to which we're office a what It's single place them and space is as of using are headquarters more space not give collaborate, a desks. to using communicate their seeing concierge, important. multiple room lot people people, and is their and about

yield, On up. money around are trillion interest pick think the invest, and negative to of markets, the of I rates parts real estate certainly grow, of of capital the So the office growth very negative liquidity. rate world. on amount still towards or and yields continues $XX and enormous low. there's U.S. X that so -- The to remain allocation still attractive institutional will same yield other

remain to runway have a pick So, market The low, that an interest and is back the available, money us, life like demand multifamily, really driven opportunity. good up. of will seem is have ahead industrial, office rates coming actually categories science

we opportunity the not come bode pick so starts is It's up, plus. done the San our is company. York our and we've have and once to New well, With it for the and me well there to fact Fran volumes, once it'll that just a hit and back,

Jade Rahmani

facing wages lot respect with on mentioned? of business supply the in business as a with labor of have any chain starting your currently of experienced? businesses, Is being as services chain the perhaps as supply impact there And well well to terms are some issues as industries that other pressure peers to that many management are hiring, Newmark's And impacts some constraints. of

Barry Gosin

And interest demand but this low rates goods services, one an are pent-up pick and supply corrected. a believe will chain impediment, the issue temporary historically chain, up most so is be impact So, for which real supply there's corrected, The generally will for that gets catch supply high good once inflation people and and have to up. estate. chain that could and

Jade Rahmani

clarify. to wanted And just lastly,

Excluding cash? net of line, the the equity-based all comp and benefits employee item income is comp line allocation and

Michael Rispoli

all Yes, it be Yes. cash. would

Operator

we further appears no closing over questions, I'll back any for It Instructions]. remarks. hand so [Operator have

Barry Gosin

global to We grow share are about and incredibly prospects. market our gain to expect continue Newmark and excited

We you Investor our also on X. at seeing Day look forward December to and Analyst

have So, great a time.

Operator

Thank everyone, today's you, joining for call.

now disconnect day. You your have may a lines, and lovely

Newmark (NMRK) 5 Nov 212021 Q3 Earnings call transcript