NEWMARK GROUP, INC. Q1 FY2025 earnings call

• Newmark reported a 22% revenue increase and approximately 40% growth in earnings metrics, with double-digit gains across all major business lines. - Capital Markets grew 33%, outpacing the industry in investment sales and origination. - Leasing fees up 31% due to increased activity in key markets. - Management and servicing revenues up over 10% from valuation and advisory growth. - Continued expansion of services in recurring business lines like asset management and staffing. - Strong balance sheet and cash flow generation, positioning the company for growth. - Enhanced capabilities in verticals and geographies, diversifying service lines.

Newmark's revenues were $665.5 million, up 21.8% from $546.5 million in the prior year. Capital Markets revenues grew by 32.7%, driven by a 62.5% volume improvement across all major property types, including 40% growth in GSE/FHA origination volumes. Leasing fees saw a 31% increase, fueled by heightened activity in New York City, Boston, and the San Francisco Bay Area. Management and servicing revenues rose by over 10%, reflecting strong valuation and advisory growth. Capital Markets grew by 33%, Leasing by 31%, and Management/Servicing by over 10% in terms of revenue contribution.

• 2025 outlook remains unchanged. - Revenue pipeline growing into Q2, but macro factors like tariffs and interest rate volatility impact results. - Capital Markets revenues expected better than 9% midpoint of guidance range. - Management and Servicing to perform roughly consistent with Q1. - Leasing business growth less than midpoint of revenue guidance range.

• Geopolitical headwinds may dampen industry activity. - Macroeconomic, social, political, and other factors could impact actual results differing from expectations.

Q: Alex Goldfarb asked about client activity and stock buybacks.

A: Barry Gosin noted deals and leases continuing, uncertainty but things still trading; Mike Rispoli said comfortable with stock buybacks as balance sheet is clean.

Q: Jade Rahmani inquired about management services differentiation and stock comp.

A: Barry Gosin discussed managed services, staffing, and fund administration differentiating Newmark; Mike Rispoli said Howard item was one-time, stock comp expected similar to last year.

Q: Julien Blouin asked about maintaining guidance.

A: Mike Rispoli said strong start, pipelines building, but macro uncertainty led to maintaining guidance.

Q: Patrick O'Shaughnessy asked about M&A vs broker team lift outs and multifamily outlook.

A: Barry Gosin talked about careful M&A, bolt-ons vs big acquisitions; Mike Rispoli and Barry Gosin discussed multifamily outlook and Fannie/Freddie.

Q: Jade Rahmani asked about competitive recruiting environment.

A: Barry Gosin said Newmark is a desirable place to work, competitive in recruiting, continues to hire while focusing on high revenue per capita