NMRK - Earnings call transcript Q1 2022

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Operator

Good morning, and welcome to Newmark's First Quarter 2022 Financial Results Conference Call. At this time, all participants will be in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference call is being recorded. I would now like to turn the call over to Jason McGruder, Head of Investor Relations. go please and you, ahead. Thank

Jason McGruder

and Thank morning. you, operator, good

only year-earlier XXXX press cash results Any with with provided release issued and activities call loan morning. cash otherwise its by respect today's call a results sales. quarter stated. discussed originations first compare today's on these Newmark and of from financial presentation operating operations on unless results refer provided period, first the quarter The XXXX to the this figures flow summarizing to net excluding

We only items of will today's in include please unless non-GAAP any the These be this referring EBITDA, them. to to our uses of GAAP results, definitions corresponding section terms on otherwise when press terms, results reconciliations on and release non-GAAP adjusted call adjusted the how basis earnings for and a complete and management these non-GAAP see updated stated. why and/or

GAAP based available supplemental the assumes various on and/or respect Russia/Ukraine no on repurchases mentioned and today's outlook Additional results to discussed and tables call results excel our information on quarterly presentation. then or in change stock Any our with price. financial social, non-GAAP the meaningful is macroeconomic share conflicts. COVID-XX website including These pandemic expectations material and other call subject to in factors, today's the political are changes acquisitions, company on in the

forward-looking XXA company's may Securities business as Securities and are they business are COVID-XX statements position, this on through may meaning about to formal Act results, our statements risks to of call considered financial from the XXXX of of of by which XXXX not Section of – pandemic subject operational assume targets also our is to the be and outlook expected. subject our acquisitions, the for uncertainties. also the not I that guidance. the should effects the remind While impact Section of goals historical statements. Such reasons. XXXX currently update amended. are differ liquidity these facts do within involve and you that Act change materially as XXXX and These amended on or statements targets None obligation XXE same do information that the actual undertakes Exchange required forward-looking and include financial any statements forward-looking what no as constitute are law, Newmark the risks regarding Except

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

Barry Gosin

Good morning our a record Chief I'm Chief These proud thank Newmark's and resulting all Financial joining increased management by and quarter revenues. consecutive Officer, fees included XX%. Revenue Alvarado. and first fourth Day; record XX% report our our to other. quarter revenues me This for for are increased Rispoli; our servicing Officer, everyone Jeff you services, in that today businesses Lou Strategy us. Mike Officer, Chief With

their leasing our increases plans compared XX%. significant reflected by quarter return businesses We our track our continue with best with in to workplace. XXXX, the revenue are total first revenue office revenues, transactions for by currently. on as ever improved XX% to to which over of recurring represent had tenants XX% in We This

leasing and sell platform representation quarter, and in the origination, talent buy we well in market side client business Almy top London of advisory Newmark specializes from our best on line BHX, known the end including multifamily. by companies, firms grown generated in investment two These enhance XX% their firm increase and revenues the have relationships. acquired growth our that and and benefited our acquired from XX%. a the mortgage and XX% more in tenant side After sales investment commercial adding and which strengthens than we business. occupy strategically class Historically, multi-market McCall from companies have the sales

of well In we will and we remain professionals. our leading outside business that some our we we Kong from goal meet launched addition, macroeconomic growth and guidance. prior the the conditions, our our confident strong our in meet Hong target leasing current the where leading and of that issued operations XXXX. industry fundamentals this over that we before remain industry’s markets our generating of will We U.S. hired believe of month, Despite XX% the revenues capital previously

in of to very our Mike. strong no are financial We and over position that, the net goal achieve EBITDA. $XXX debt million adjusted virtually remain confident to of turn on I'm happy and a to call with XXXX track With

Mike Rispoli

its XX.X% EPS Today, ever Revenues up million compared $X.XX with to versus and compared quarter XX% reported Barry, was $XXX.X you, Adjusted morning. up million. million. to million, was best good earnings. EBITDA first $XX.X $XXX.X up and $XXX Thank $X.XX. revenues XX.X% were Newmark with Adjusted

Our based to XXX of to related XX.X%. growth remainder million was million to variable the revenues, and due related $XX.X to adjusted business commission acquisitions compensation, $XX.X EBITDA and was Expenses versus improved million increased activity. by which basis by primarily increased points XX.X% margin was $XXX

balance quarter ratio our Moving was cash at to $XXX.X end of net sheet. the million leverage had and times. X.XX We

XXXX, March the of million XXXX $X,XXX.X asset, from GAAP we $X.X last on of nearly that XXst second the Xst as Since remaining our held of Newmark we During XXXX, NASDAQ the dividends. NASDAQ balance were received end. hedging $XX.X these year recognize quarter additional sold year. million from compared sheet realized at of to in shares billion the shares July and income we quarter, through From the including

per NASDAQ of sale This $XX.X for Our quarter decreased first capital. X.X $XXX.X shares for the of share. an includes close, working end, normal which repurchases year million $XXX.X million shares repurchased Newmark related and we of through liquidity average yesterday's in $XX.XX shares, changes by decline million Newmark of million at $XX.X X.X of to price year from million the million stock

Turning our to strong the quarter, we and visibility continue have macroeconomic performance in and our second revenue given guidance. can quarter our confirming year confidence first Despite to we our the environment, are for current full outlook, guidance.

$XXX.X and increase We revenues X% to grow expect X% between adjusted million. to EBITDA million. We X% $X,XXX.X compared anticipate X% versus between and with

to adjusted and compared expect earnings our tax XX.X%. We between XX% be with XX% rate

$XXX X% call I'd We average weighted to to with expect million. compared like over now, decline between Barry. X% turn to the And share back count to

Barry Gosin

will XX% by and majority of XXXX consensus, with the we have being increased on this growth XXXX Based EPS our analyst organic. between large a

that of as back While our only up to shares. is now ready we're buy is since continued we X% questions. why stock to Operator, XXXX yesterday, take

Operator

Piper proceed. you. first from you Alexander Thank from Goldfarb Sandler. Instructions] may Alexander, is question Our [Operator

Alexander Goldfarb

Great. Hey. morning, Good down there. good morning

Barry Gosin

morning Good [indiscernible].

Alexander Goldfarb

the volumes First, on quarter. and the record appreciate commentary in the record revenues first

about full just And parts NASDAQ second One the what stock, then the I no in that overall two the was year is the overage, sorry, there guess drove $X.XX is was the gain, strong given commentary, outperformance in the results. the So that. the I outlook. change mean, in

or are other the back of first strength half So revenue at you just weaker or work are things of guys the you a expectations there quarter? expecting the that didn't such sort given EBITDA raise

Mike Rispoli

morning, Good Alex.

$XXX.XX. had that in of exit shares year received at second about average over NASDAQ, of stock an were the the the on So back to quarter we through March, the $XXX. at the we last And of course time able

over our So period to little had more that the I like XXXX, in to respect soon continued into results. That's a first to think back the EBITDA that visibility some as of a guidance and The about long strong earnings for X.X% X% over that of consider We in. pipelines be is guidance. the I get None GAAP. time. half to have and earnings. we'll which value just And guidance, in is quarter, of our revisiting course, great gain we we above the received year, as be credit think up we all in XX% as QX of since we'll XX million With performance. non-GAAP

Alexander Goldfarb

Okay.

that first follows guys that now don't in right but hopeful now, want you suit, right you backdrop the strong be to is if macro correct? second So everything the you're correctly, I quarter Mike, understood given outlook just quarter, the adjusting

Mike Rispoli

I think start the year to the too early little guidance. in changing our

Alexander Goldfarb

Okay.

at retain the think or it again work? on previously, The for accelerated is to to stock else macro I you second you that, NASDAQ, else in the were rush accelerating no guys planning that exit, something you flexibility, you question was buybacks either to going was something were due changes backdrop, obviously or there that but also, you're on indicated had

Mike Rispoli

conditions always that. Our got we stock intent those the billion, over value gradually X.X changed time, the maximize we shares time. sure from we was make And into sheet first because Certainly, X our the of to billion and on quarter. exit as the wanted balance over close put to to macro

time it right was think we the So it. do to

a to buy where saw, for think into stock capital. trade the fair the you And quarter consider aggressively. fairly below back to is as that we'll ease as As we continue we continues stock second value, continue long

Alexander Goldfarb

Okay. Thank you.

Operator

from Sachs. is from question line next Goldman is open. Our your Chandni, Chandni Luthra

Chandni Luthra

you my everybody, Hi, question. thank morning, good and for taking

transaction talked bit do this lot perhaps the multifamily volumes standpoint? some volume, REITs about How multifamily spooked. lot companies of a form a or in are from you about basically out leverage several from transaction seeing activity, priced talking heard are getting about think we buyers So year? week a how and ahead you What in of your falls seeing of

Jeff Day

seen flow Jeff in which still this into saw huge transaction the buyers, group marketplace. We year. in liquidity a the going the quarter. Hi, the in last first are second good number every They total in decrease is a quarter. seen very good very significant flow We've We've were of Day.

we're a material second but in So slow down. optimistic there. the that interested still we're certainly supply we're that out getting capital of there's the not through sufficient a expecting very space multifamily quarter, into Still cautious,

Chandni Luthra

thread. that with industrial, could And on volume I if of sort kind continue of transaction

into last I they looking XXXX? if So how a cautious about supplies. bit Amazon morning, ahead their aggressive to reported be a side basically perhaps more may. the do And talked think in that mean, too on I basically They about and you getting transactions it bit this industrial night, going

Lou Alvarado

is Hi, Alvarado. this Lou

We And the been absorbed a down as space supply industrial, – that's been it's of the coming demand And really well. issue It's seems from and been that there's lot slow Amazon, of on more really there's the be been so that it’s activity’s A to up than construction – have supply. some have new been there. still but repurposing others space. the taken there's been been Yes, yet also seen has the there. online.

So a activity seeing strong. we're we're they significant in those closer and still that for slowdown seeing is of volume, cities fair a distribution, particularly in still larger last amount as not the move mile

Chandni Luthra

Anytime it. one get may more. Got

these plants geopolitical guys How these have lockdowns markets, you do to You businesses, expand in situation have that to businesses of about obviously in the scale ability outline we you right think in China. newer now given just XX some expanded but COVID eight global to these your into?

Barry Gosin

Great.

Operator

Rahmani from KBW. Our is open. Jade your from next line question Jade, is

Jade Rahmani

Yes. Thank much. Can hear you me? very you

Barry Gosin

Yes.

Jade Rahmani

Okay, Hello? great.

last seeing Just investor to in technical no there's the the just sure weeks? behavior move-in issues. given thus rates any wanted far changes you Are in make few

Lou Alvarado

Lou the impact. some rates is this No, Alvarado. have definitely had Jade,

in not is deals what that positioned are really number reduction cash but and activity. bidders, well said There's still properties the a Jeff plenty looking there you're slowdown for As in seeing a of are transact. real the out still of

Jade Rahmani

if we in changing lock a right still folks of are kinds they assuming trading there's in fixed process, there rate I seeing deals lock perhaps that any place, it's are price deals isn't or but we not debt, it's those are that re-trade in now? suspect be pricing they if or seeing in – would rate pricing debt And concessions? are rate floating in would rate place,

Lou Alvarado

a still two. delays rates closing, in of just forward but between there deals moving impact the the are some seeing re-pricing either or connection are and still the is We

Jade Rahmani

are Do asset rent kind for of multi-family IRRs family that target seems buyers think of component. Okay. hundred over For especially points at IRR rental actually hurdle single normal investors, it was some years, you basis some if those that several development last looking the classes rates? there's I couple models, above and and of

Do rates. already seeing? are likely there's lower to hundred accept absorb to are are needing lower what cushion pace the than So Or you are they hurdle with this and closing capital more conservative the part slightly IRR beginning a forward that much rate because start going IRR get to cycle of hit we to in of investors think go deals just be and deal basis still the more point deployed? lower much, several and

Operator

interrupt like this speaker It apologies. difficulties My the need We of technical seems question. some to do we're with lines. having

Barry Gosin

don't. we actually No,

Operator

Please be patient while we...

Barry Gosin

don't I technical a got, this on. Operator one. guess need here. issue to I we We've interrupt do oh hang have can, we

Operator

Okay. continue ordered. for we to Thank get patience this Please you you patience. your we get for this your Thank while hold while sorted.

Jason McGruder

Okay.

are We back.

Operator

now may you Hi, proceed.

Barry Gosin

All right.

Jade Rahmani

hear you Can now?

Operator

Yes. loud you We hear clear. can and

Barry Gosin

All right, let's back to question. go Jade's

think were on I Jade. we

Jade Rahmani

it was that ahead. Yes, oh you just got... basically go

Jeff Day

Jeff, we it. make won't is remember repeat This Jade. so you question, I your

the that years a I returns what matter. SFR and BTR have way would say last multifamily over few great So for is that had as regular

in and material re-trades be lower way price process start in the certainly bidder or going are you're transaction your So take rates now? by advantage with of the is are to pieces. that now, to question right piece, is people let's any So a is, price. the two, a transaction accept otherwise, of try to middle that's first And to there's when the going I and forward? was a in find two a reducing going movement yields to believe going One there set,

quite multifamily returns or will that forward of still significant the sometimes to have years, built flow. capital few BTR of a going available work. SFR, it a Some return been but there's amount not fall models and that basis due these rates into I in work, and over do business won't sometimes the bit to they increase still for even because going that past a it's risk believe necessarily if off impact on There's so tremendous an

Jade Rahmani

Okay.

So there's price some being without like it there correction? absorb investors necessarily for rates a sounds cushion to higher

Jeff Day

so. I think

Barry Gosin

opportunities, spreads of widening of more funds of some market demand and rates enormous some this – which if increase will by housing rates, SASB the in Jade, of supply, if value there's like which speculative, higher more higher. will a And being moments certain our fanning business up will other good Freddie there's some this supply. amount are respects. It then rates reduce slows some the markets. for in interest opens debt and although opportunities are country an value for there There'll are some replaced development be and and respects in development, increase less in And of bit be is some subsequently when it active. time

there So, yang. is to yin always the a

Jade Rahmani

REITs. clip are Great. And then capital, in one capabilities investment acquiring on a other advising to non-traded question is I've could seen that billion has at It wondering the non-traded [indiscernible] phenomenal the Newmark REITs raising that their us whether seems are deploy deals to banking to And per REITs $X remind re-acquisitions you going do such would raising be equity be order as have that month. such capital. if

year? So that Newmark opportunity going is this forward an for

Barry Gosin

opportunity all Newmark that enormous going about really liquidity we'll think is excited and play amount it. in aspects the need that it. They We also Yes. really And an area that, for is of We drive those invest. well. see, to well in markets values to on see we're as we of Jade, and

Jade Rahmani

Thanks for the taking very much questions.

Operator

Our from question from Patrick, Raymond your next line is is O'Shaughnessy James. open. Patrick

Patrick O'Shaughnessy

business see you the brokerage morning. How yours all? digging into rates of debt little I guess a and bit at that good do more. Hey, mortgage the topic of maybe interest if impacting placement

Barry Gosin

isn't doing just when forms of there's data little and what when bit doing more – a there, said. we're be, disruption, and but the equity I moment obviously will there's spreads of Look, we're other in there recaps security a

are. the need rates interest refinance So of regardless where to always people

Patrick O'Shaughnessy

Got Okay. it.

remaining guys are there net your appropriate structure sold shares, that of in net around and your capital Now debt-to-EBITDA thinking long-term NASDAQ at this is business point. model? your you for your How debt have you level is about what

Barry Gosin

grow the the net always shareholders use to our we've is think X.X capital and debt to I going we're capital capital operating to at certainly to that use continue target. to below or said long-term leverage going company. return times We're of

the business. leverage. targets to the we that and really discussed EBITDA we've $XXX think Get million low we can maintain So operate

So a great position. we're in

Patrick O'Shaughnessy

Thank you. drivers revenue then the what is lastly some it. me, from to maybe behind to leading there? growth and can of And your fee management Got speak the services you really strength

Barry Gosin

non-recurring and So the really, the valuation management Patrick, really business. revenue on it's our

corporate Our focus in service our and we've are consulting and had have invested areas business side management. on in a the property Those growth. that

them working amount to we're we it's targeted what expand way and to of want really continue been at a happy out. have the We

Mike Rispoli

in we didn't the last of also have business quarter and the the this we in have there, and first in flex first Yes. And year we quarter, year. have which

So that's contributing. also

Patrick O'Shaughnessy

you. Thank Great.

Operator

There further Instructions] [Operator questions are no at time. this

Barry Gosin

And the quarter. us forward for you business updating on you Thank we joining today. next look to

Operator

session. no Gosin concludes to conference closing further, like the are would to there Mr. our As now I this question-and-answer remarks. for turn back any over

Barry Gosin

for And next you us Thank the quarter. we on updating all you joining look forward to today.

Operator

your That you participation. call. concludes conference for the Thank

You may line. disconnect now your

Newmark (NMRK) 29 Apr 222022 Q1 Earnings call transcript