Cushman & Wakefield plc Q3 FY2025 earnings call

• Momentum across all business areas with largest third quarter leasing revenue in company history and new high watermark for third quarter cash flow generation.
• Announced $100 million debt prepayment, total debt paydown to $500 million in 2 years. Year-to-date adjusted EBITDA margin improved by 70 basis points.
• Lowered cost of capital with term loan repricing and revolver amendment. Raised 2025 adjusted earnings per share guidance to 30%-35% growth.
• Onboarded new institutional capital markets advisers with total average gross revenue over 200% higher than 2024, hiring over 45 advisers. Accelerated third quarter organic growth to 7% in services platforms. EMEA project management revenues surged 30%. Year-to-date increase in large and mega deals by over 40%.

Third quarter revenue was $1.8 billion, up 8% with organic revenue at 9%. Leasing business grew 9%: Americas leasing grew 11% driven by flight to quality in office and industrial; EMEA leasing grew 9%; APAC leasing declined 6% but Singapore and Australia performed well. Capital markets revenue grew 20% year-over-year: Americas Capital Markets up 16%, EMEA Capital Markets up 14%, APAC Capital Markets up 84%. Services revenue: Americas posted 6% organic growth, EMEA grew 17%, APAC recorded 6% growth. Adjusted EBITDA was $160 million, up 11%, with margin expanding to 9%. Year-to-date adjusted EBITDA margin grew by roughly 70 basis points.

• Raised 2025 adjusted EPS guidance to 30%-35% growth.
• Full year leasing revenue expected to grow towards high end of 6%-8% guidance range.
• Mid-single-digit Services revenue growth expected.
• Full year capital markets revenue expected to grow in mid-to-high teens.

• Still in ramp-up stages with capital markets platform, with runway ahead.
• EMEA margin expansion in quarter below prior quarter due to FX and incentive compensation timing.
• APAC results impacted by timing of Onewo joint venture earnings.

Q: Congrats on the quarter. Just looking at the Americas Capital Markets growth, do you feel like you are still early in the process of seeing the flow-through impact from those hires sort of benefit your Americas Capital Markets growth?

A: Yes. We are definitely in the ramp-up stages with regard to our ability to execute in the markets and the capital markets in particular. And there's a lot of runway in front of us. So we anticipate continued growth going into 2026. We're not done building the platform either. And I just want to point out that we're building a global capital markets platform, not a U.S. institutional platform.

Q: Starting in trends in EMEA, I guess, they were really strong across service lines again. So just curious in your view, how much of that is any change in the backdrop? Has that gotten better at all?

A: In terms of momentum in Europe, we're seeing leasing and capital markets observing growing strength across all of Europe from our side. The strong Cushman & Wakefield market performers in Q3 were U.K., Ireland, Netherlands, Spain. They all had strong year-over-year gains in both leasing and capital markets. And in general, when you think about what's driving the leasing fundamentals there, it's supported by good labor market resilience, healthy corporate profits. The office take-up continues to trend higher over there. Vacancy in Europe is the lowest of the 3 global regions. It's now under 10%. And when we talk about what's supporting capital markets, inflation over there returning to target, multiple rate cuts by the European Central Bank contributing to easier financing and stable economies and stronger euro boosting investor confidence.

Q: On the Services side, it seems like after you guys have done almost a couple of years of work on that business, you're back to that sort of mid-single-digit or so growth level. Can you talk about just your confidence level of that kind of continuing on a go-forward basis, what the prospects for the business looks like?

A: As you've seen, we've made incredible progress this year in Services, which has seen accelerated growth for the past 3 quarters. And importantly here, we're moving up the value chain of services into more technical services, again, something we'll speak about at Investor Day. We've also successfully retooled the Services business in a number of ways. We talked about desiloing. This means structural changes in the organization, leadership changes that we've made across the Americas and internationally and cultural changes, bringing leaders together in person often to think more strategically about the business on whole, how we can cross-pollinate, bringing it to our clients as one entity. And secondly, we're focused on profitable growth, not growth for growth's sake. A lot of you heard me say that early on as we started to walk away from nonprofitable contracts in the Services business. This is not only good for our bottom line, but for our clients as well. It allows us to focus on the strategic value we bring to their real estate strategy, and it increases our customer retention as we move up the value chain in terms of technical services that we're providing.