NMRK - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the Newmark Group's 4Q 2024 financial results. Today's conference is being recorded. At this time, I would like to turn the conference over to Head of Investor Relations, Jason McGruder. Please go ahead.

Jason McGruder

Thank you, operator, and good morning.

quarter results fourth morning. release its issued XXXX press financial this Newmark the otherwise on ending X with provided the December earlier call XXXX, Unless results the today's stated, compare only XX, year period. months on EBITDA. we specified, terms referring results including otherwise as a and will basis, adjusted Except non-GAAP earnings to be our only adjusted the

origination cash from to before cash loan flow Unless otherwise today sales. cash discussed GSE refers figures and operating used with respect excluding sorry, for is of flow also operations term net provided same may stated, any to by activities, measure cash the operating cash impact use flow generated cash We -- the business, FHA loans. employee the the which by

the and on website how, management these results our as Please well for refer to when as definitions today's statistics. updated items flow GAAP additional why measures information press terms, and results for industry to our economic quarterly release, reconciliation or complete and any relevant and tables the non-GAAP of corresponding of cash them, the presentation uses on supplemental

today discussed in or meaningful outlook stock price. The no material our assumes acquisitions changes

or be other subject Our social, beyond and on our change factors. considered should goals targets None various to political XXXX formal guidance. of macroeconomic, based expectations are

cause to Also, including, are undertake no statements subject I call without actual this economic forward-looking law, as update we remind statements to and you uncertainties, any statements. required results expectations. business. Such Except to could that contains limitation, which our forward-looking our information obligation differ on by and outlook statements from concerning risks

SEC Officer, call including, the statements, that Executive are the incorporated of to other but please not host discussion Barry and which I'm happy and and filings, reference. most see regarding Gosin. over risk SEC complete information disclosures factors factors now a to, Chief forward-looking may in recent impact For by risks turn limited these to forward-looking filings, our our our the

Barry Gosin

for the markets you made our across thank management capital quarter. leasing Newmark by XX% over Good joining double-digit and morning, us. X line major every over top the by improvement in in past drove has and XX%, servicing talent and -- investments by We grew platform and years year XX%. business The the line

industry markets platform share. to we materially continued capital Our outpaced the our as market expand

Excluding increased quarter for the XX% by XX% for GSE for brokerage, fourth transaction, investment origination and XXXX Signature Newmark volumes sales. mortgage XXX%

For XXX by when the XXXX, in the which our with is share validate approximately with business. started to our increased market strong up basis X.X% year, X%, we is debt Xx talent. we These market of U.S. which by share compared points our leading strategy results

clients, to We a our our growth across which key are platform. to drive adviser continues

in positioned industry in U.S. bid-ask past, the in data of Newmark. the class; an reshoring industry ongoing debt narrowing for We the expected in outsourcing the if volumes; trend industrial, of near-term intelligence. by investments gains is As of that capital approximately following manufacturing economy; real anticipate industry continued capital success strength we trillion fueled over drive poised growth the have are artificial in estate that of the you as for the company great, fundamentals asset and expected allocation markets institutional double-digit to the estate real maturities, belong of services; centers including for the spreads you to interest said U.S. the and improving rates; investment The $X.X next stabilization is of and at the are the an years. trends: several

new employment; Additionally, construction, the alternative space following growth of we into uses. in pipeline office conversion and the factors the ongoing office in a of expect sector: and positive office the to workplace return reduction in

This has growth sophisticated for transactions adviser elevate markets execute demand is innovative in solutions. professionals and and and our clients. enables on brand leasing complex of to new that Newmark driven as us its go-to create our the behalf continues require to capital transactions

Our anticipate strong pipeline of and meeting major across and XXXX revenue remain least by growth earnings at XXXX. adjusted we throughout in in and We million all year. business confident robust, expect the EBITDA of our momentum lines target $XXX remains

moment I Commerce. United the want Secretary to Howard take States a recent to nomination of of discuss Lutnick for

Howard a Howard at he confirmation, U.S. As from Cantor, a abroad. adviser. many It position catapulted to decisions work BGC, our and has and Newmark sector, announced make growth Senate expansion with of States you highly to the side-by-side our In and bold with a powerhouse someone competitive Howard call build his and in my pleasure step Newmark and down company's been know, helped upon a privilege friend decisive will have has I partnering can Newmark. United that into that

for are has thrilled people. contributions are support organization and will We his and thankful to his the the and the American invaluable partnership he made serve expertise

support building to happy bench continued Rispoli. We incredible excited and forward Mike team are years prospects. I'm our the an and We that, a have With turn over the XX call look CFO, spent management our the our future to about to growth. last deep to

Michael Rispoli

XX.X%, growth year-on-year comparison We Thank We from solid is transaction. of our of other grew including This and management all lines, generated businesses. consecutive we the faced good revenues We million. our nearly servicing morning. management and across our XX.X% by improvement. sixth performance $XXX.X impressive, of considering period Barry, challenging fourth business in strong revenues increased the you, the to billion $XX.X quarter each services, Signature organic

revenues type. transactions. on revenues across Leasing by Newmark growth by every Capital major in many XX.X% strong reflected double-digit high-profile XX%, property increased strength led advised which markets by grew where office,

Newmark transactions, exceeding metrics. materially industry markets increased capital by XXX.X%, relevant Signature growth total the volumes Excluding

XX.X%, included and increased servicing increased revenues. growth Compensation interest which costs Turning warehouse other offset by of expense, to revenues management the and and to by Non-compensation reflected pass-through higher expenses. which in costs expenses higher were businesses. associated both our commission-based related

XX.X% and XX.X% in items, these rose year, rate adjusted the expenses by non-compensation in X.X%. earnings tax quarter of company's line with impact the the The for previous guidance. Excluding was for

million, EBITDA earnings. XX.X%. Moving on up EPS We $XXX.X $X.XX. by XX.X% to increased to adjusted was Adjusted

adjusted prior the legal our up was up year margin settlement, slightly. EBITDA XX.X% Excluding EBITDA and favorable was

On by the approximately full our expectation to Later, continued expansion. XXXX points discuss XX.X%. improved basis, for basis XX our margin same will margin I year

With share count, average fully respect adjusted in for earnings our to diluted with million, weighted XXX.X was share guidance. count line

repurchased During X.X we the quarter, million. shares for $XX.X units million and

an XX.X of shares year, full units price for million average the repurchased $XXX.X $XX.XX. at For million we and

investments the of healthy cash business, headcount, strong growing was generated generation cash capital corporate the in representing offset year-end return million approximately balance from incremental return With of is the to balance the million invest million and to million Turning We sheet. cash normal X.Xx sheet leverage. reflect as $XXX.X EBITDA to other capital. from and of used XX% as of $XXX.X well net This changes $XXX.X with balance and for capital earnings, The of year ended sheet, and cash to equivalents conversion, by $XXX.X debt. and working million a movements $XXX.X shareholders, positioned growth well revenue-generating primarily shareholders. Newmark in for XXXX

guidance. to Moving

XXXX year full outlook for compared Our with is follows. as XXXX

the to $X.XX, revenues midpoint. total and XX% an of X% billion, EPS up $X.XX We $X.X adjusted XX%. increase of expect $X.X We at billion and approximately between between anticipate

anticipate earnings to to increase of and $XXX $XXX EBITDA adjusted We expect XX% the be between XX%. of million adjusted our in to XX% an million, rate tax range and we XX%,

expansion. This margin At of basis guidance adjusted XXX outlook growth expect highlights increase total XXXX least on our operating range, at Newmark's strong XX.X% of points X.X% leverage. midpoint representing in EBITDA we a the revenues,

call expansion target in continue our EBITDA We million between adjusted of of XX% to are additional adjusted earnings next at 'XX EPS, XXX This XXXX a in point would for XXXX. questions. over that now X goal least like means an basis years. points. EBITDA growth representing margin than at we $X.XX and introducing to XXXX, basis open least Also, to I and margin by expect $XXX the we XXX improve now more the

Operator

go Instructions] with to Sandler. Goldfarb [Operator first We'll Piper Alexander

Alexander Goldfarb

here. questions X So

outlook, anymore? just second being to And the to guess, front. your is question settlement, D&O in regards benefits then change G&A much from premiums? with this. Two-part any on of How not material the G&A in there First, Howard earnings the I

Michael Rispoli

Sure.

our Of drive and over is reflected in to efficiencies continuing as invest to course, AI in the in to invest Howard moving business time. on guidance, continuing is

So premium that's our D&O. reflected increases any in including all

Alexander Goldfarb

Okay.

your Second platform. question. Barry, about you've data you and in and lot release your centers guys the talked growth that was -- it spoken in a seeing are

you bring these be as look we'll what's versus the the need I data their to sort maybe some see. the perspective from But could provide versus away user. you curious, don't ultimate that end online. how reasonable topic. of close know of things the hype Just it's or challenge just to challenges they hot how utility a of There's far time at hookups, centers,

Barry Gosin

look long the being acquisition, are on centers $XX the expect the the do us last are with the other power billion did term. future manufacturing. Those dealt and advanced CHIPS the year that over by for reshoring, incredibly heavily industry. close intelligence -- of over data makes issues investing artificial particular We The And advent new power to we bright involved and also, in administration infrastructure, to of combination in there being hand, Act, more. in

the which includes equity nature solutions the power, up to land, and and includes which on the tenants. the business users which the the designing right it come our those and all of financing, includes fronts, the which and The the players with the and all hyperscalers is technology, and includes we're solve includes -- which

we position and doing share that space. We a amount take of that in are business early, significant and space. capture in result, crease that in early an incredible advantage acted of we're market We a the saw to

Alexander Goldfarb

Okay.

we like a come this peter is of few say a versus will read but bubble, it's, will it's years, don't it want to for moment you, euphoria hype stuff but like that like there's out? right a now, I in lot it sounds real, of a fruition about the to So

Barry Gosin

you believe of vertical. it's the believe than in America, mean, more in I if think you in in AI, you you semiconductors, robotics, advanced in you manufacturing, should I in believe believe believe you euphoria. reality this believe

Operator

Patrick next go with Raymond to James. We'll O'Shaughnessy

Patrick O'Shaughnessy

forgivable $X low it in what the loan for in spend then XXXX? fourth was only quarter. your million period? are so the So of expectations Why And

Michael Rispoli

business over in we year second row consecutive spent invested future $XXX we growth. the year, That's the million. the a For heavily into and where

point a quarter. just So is time, the in quarter it's fourth X

the to It say, on where at of the to be I look return into acquisitions. best least have in of see just our would it expect capital to be think growth on depends could employee amount looking really money over a could that period. or would at ahead, we you we It continue loans company. invest I investments.

Patrick O'Shaughnessy

to at extent turnover FHFA structure multifamily potential it. and ownership leadership for the Got impact Freddie's what does outlook To and changes activity? your Fannie

Barry Gosin

same. in there But terms have happened We anything loans and of before privatization if was Freddie probably going the I the anytime you change, mean, the Well, pretty and think that's historic accelerated happened. precedent of historically. spread importance the were or a change for The soon. change important. in Fannie basis There's a conservatorship, certainly, XX what any to is still point caps loans. was, don't

Patrick O'Shaughnessy

then detail Got Lutnick it. on Any how ownership? And any will last or views me. for divest his

Michael Rispoli

we confirmation and out as Certainly, up release hearing open when that sell more. a know shortly the shares doesn't expect he put think announced, Secretary his sure was press coming on appointment in Commerce the we'll to is originally I'm I market.

Operator

Julien We'll Goldman Sachs. go Blouin with next with

Julien Blouin

year-to-date? capital end outstanding sort what a into outlook being about Congratulations trending of how quarter. thinking I to markets baked help in on understand year 'XX? how guidance? can strong activity ultimately, was really what is you are of an you us is the after Or And guess, XXXX sort

Michael Rispoli

our capital the market over we in there's remain all remarks, growth Barry next years. his in in double-digit pipelines but strong of our remain businesses. headwinds see strong. X said As the our pipelines prepared Certainly, across some And markets

So if been way the have headwinds. it weren't would there better market

Julien Blouin

touching any any trade of Okay, we've guess, buyers guess, seeing great. policy maybe signs uncertainty around on do some that from to industrial, that could have pausing occupiers sort yet? I lead Are you peers of I maybe heard that? view specifically fears And on activity. and your you of

Barry Gosin

in Look, but the creating to chain positive. capacity But determiner we there's supplies. some positive those about our Supply that States in effect think always -- view is be have fear that the People manufacturing, a to on in at it's good. likely United the inventories the investment United camps jobs of look will are things. a there pretty We as a excess whether and metrics in States. reshoring,

to last of of There the was bit of that's aspects by was we're that, an oversupply. oversupply a accelerate But advanced I and issue manufacturing, chips. quieter any going replace any it think an will in last terms in encouraged Other terms little year the of year industrial. but industrial, of

Operator

to [Operator Instructions] next with go Rahmani We'll KBW. Jade

Jade Rahmani

pipeline deals market? banks? you In increasing that record the it's Can Do of terms a from the banks, you from you the in debt if transaction. large Signature the a any of anticipate trend you sales broadly trend, clearly, last deal, to talk year, loan see won portfolio

Barry Gosin

obviously, the they're base. capital in But between capital, over out increasing book. the years. And and a in if amount earnings Well, many certain and capital of CRE overweight real trickle their are Basel banks their requires probably suspect next reserve earnings banks will fundamentally, their I to titrating estate. overweight would that they're carefully X CRE overweighted building

predicted. in have not accelerated but So that might the same the is people fashion answer yes

loans in And banking financial slow the in way to interest allowing Fed that and the least and able selling to the impact they their lowering those a structuring rates community. crisis, the reflate has the shore and capital. did spread, are were was on up banks by negative steady the We what and make

overweight Fed private debt smart capital, debt proliferate. to insurance how and market the of an integrity going captive and respect doing system. movement amazing that's a of equity and that And But there the our banking is the companies, both general, preserving funds is private to resilient there insurance companies in to it's with is

was private will over So the a traditionally world. big finance part -- the of to bank what move

Jade Rahmani

markets your in wondering, I you're XXXX? in double-digit to next just the X XXXX markets growth years. you of what perhaps your outlook, both you assumptions are It But think then capital over terms just could would and to hear what about in talked And out capital thinking. leasing be tease for helpful

Barry Gosin

years space we attracting in a every not We're today. have company Three -- contest. We're considered benefit talent. conversation every beauty Sure. and ago, adviser. of as necessarily X sort Look, ago, building fundamentally, white we necessarily of weren't in and years a we're the having -- every in conversation. We're go-to

a market significant the achieve of the for opportunity of share fights there's So against market. to headwinds amount that us

we've if headwinds. accelerated any We about optimistic moves, that. far -- we able been is of being interest we're demonstrate And some So there that's moves. that over to because interest than rate think pause short-term greater rate

the to leasing. We We same do in that. continue take approach

coming is when news don't productivity people good the do leasing, So kind are show up. the productivity business the that don't to what office. is -- news -- is The that is have? good realize people have a back there you a culture, you people decline There of when

are around crypto it's expanding. there well. The whether the generally which office pretty amount And They're industries office are space hotels, There anecdotes more well new up. and residential in of services building moving new space, right the cropping into space. direction. businesses, the has of done technology bodes the Financial they're cetera, space. in So et much in not also is conversions and that

strong. has And the market U.S. remained

we, of will headwinds. most plays and high-quality and the this deal best business, room garner think the company, platform solutions, And But brokers professionals advisers well that the as and to that to expand us. high-quality as the people, kind coupled want good gives a the the all a investment overlay continue is a place bankers, I at we think opportunity. for running of for attract bankers best of with who them we really the be with and So and for people

Michael Rispoli

a up faster we to be markets the I at that hear on that And that. think add shocked roughly we capital little would I think than will guided don't X% midpoint, Jade, grow you'll revenue. So

Our our that in line. little we than Those slower are of sort and leasing, a probably high-level management think the assumptions.

Operator

We follow-up from Alexander take question will with Goldfarb a now Piper Sandler.

Alexander Goldfarb

had have your with overseas the some margins Often, you firms suffer. and guys luck U.S. go overseas success Barry, and good profit expansion.

bottom returns profit looking make the there that on and out you needed comparability been to you So overseas adjustments guys U.S. just are expect you any sort that platform. how drive of a of the of U.S., that ensure line versus sort your same have you can curious to if

Michael Rispoli

and ago. Alex, so or probably last business, maybe X in. Eve building U.K. was we've started the We I'll the our We're Gerald year-over-year. our quarters I We bought U.K. Mike. fourth or up X Germany quarter and the quarter Barry in XX% companies build now all start we in in then will of together. our revenue international jump just started it's to France U.K. combined X. building continuing mean,

for as it's out. better, time think profit take play than be in margins I seeing We new to the if internationally to so think And countries the some not we're the what of going good, U.S. will

Barry Gosin

it's that We to agree. believe equal We have ramping certainly could obviously, I be don't Yes, think -- better. term, up. profit margins we're our going that long or

Operator

conclude the does like over for to the turn This Barry today's comments. CEO, At call closing any I this call. question-and-answer portion to of Gosin, would time,

Barry Gosin

very joining I next thank look updating and excited so Thank us you forward remain the to company, about for you. today. on quarterly call, our you we

Operator

today's This call. conference does conclude

may now disconnect. You

Newmark (NMRK) 14 Feb 252024 Q4 Earnings call transcript