Cushman & Wakefield plc Q4 FY2025 earnings call

Michelle MacKay was excited about 2025 results, three-year financial targets, and AI evolution. They executed against targets, with strong adjusted EPS growth, highest revenue, etc. They won an integrated portfolio management mandate. AI will create winners as trusted partners with certain capabilities. Neil Johnston discussed financial results, including top line growth, adjusted EBITDA growth, free cash flow, and leverage improvement. Addressed non-cash items related to Greystone joint venture and investment gain. Talked about service line performance by region and capital markets. Michelle MacKay emphasized entering 2026 with confidence, strategic priorities, and invited to AI webcast.

In 2025, total revenue was the highest in company history, with leasing revenue also the highest. Adjusted earnings per share grew 34%. Free cash flow conversion was over 100%. Net leverage ratio was 2.9 times. Fourth quarter capital markets grew 15%. Leasing business had solid performance. Services businesses made strides. For the quarter, Americas leasing grew 5% with office and industrial strength. APAC leasing revenue up 5% due to India and Greater China. EMEA leasing grew 7% due to Netherlands, Belgium, and Poland. Capital markets grew 15% globally, with Americas up 19%, EMEA up 9%, and APAC down 5% due to prior year comparison. Services revenue grew 6% globally.

Anticipate 2026 revenue growth of 6% to 8%, similar service line growth to 2025. Adjusted EPS growth 15% to 20% with free cash flow conversion in 60% to 80% range. Plan to continue delevering to reach two times leverage in 2028.

Concerns about AI disintermediating commercial real estate brokerage, but believed concerns are overstated. Also, potential impact of office sector changes, though Cushman & Wakefield doesn't own real estate and sees opportunities with building changes. Delinquencies in real estate could impact, but net positive for brokerage and services if leading to more building changes and price discovery.

Q: Concerns about AI disintermediating mid-market or smaller deal size brokerage businesses.

A: Michelle MacKay believed concerns overstated, AI augments trusted adviser.

Q: EMEA margin lower year over year.

A: Neil O. Johnston said full year margin improved, fourth quarter decline due to timing of one-time expenses.

Q: AI impact on end markets across subsectors.

A: Michelle MacKay suggested attending webcast for discussion.

Q: Guidance on leasing, capital markets revenue growth and margin trajectory.

A: Neil O. Johnston said similar to 2025, pleased with leasing growth, no full-year margin guidance.

Q: Cross-selling initiatives.

A: Michelle MacKay talked about de-siloing, using AI in different business areas.

Q: Capital deployment and delevering.

A: Neil O. Johnston said balanced approach, focusing on organic growth and debt reduction.

Q: Exposure to office.

A: Neil O. Johnston provided mix percentages.

Q: AI impact on headcount.

A: Michelle MacKay said AI empowers employees, no massive reduction.

Q: 2026 guidance relative to three-year outlook.

A: Operator and Michelle MacKay talked about capital markets recovery and industrial demand.

Q: Stock buyback.

A: Operator said evaluating, priority on organic growth and delevering.

Q: Services side specifics.

A: Neil O. Johnston talked about services growth and project management strength.

Q: Hiring in 2026.

A: Operator said continuing on pace with substantial recruiting budget.

Q: Capital markets and avoiding recession.

A: Operator said avoiding dramatic economic event.

Q: Industrial demand for large sites.

A: Neil O. Johnston talked about flight to quality, e-commerce trends.

Q: Multifamily origination strategy.

A: Michelle MacKay said considering, being more hands on in Greystone JV