Newmark Group, Inc. Q4 FY2025 earnings call

Newmark Group, Inc. saw strong momentum in Q4 with double-digit growth in total revenues and adjusted EPS. Investments in talent and platform drove growth across business lines. Leasing saw 17% growth in 2025. Management and servicing revenues grew 12% to over $1.24 billion. Capital markets gained market share. AI has fueled results in various areas. High-margin servicing and asset management portfolio surpassed $200 billion. Total expenses up 15.7%, but excluding growth investments, up ~6%. Adjusted EPS increased 23.6% to $0.68, adjusted EBITDA up 17% to $214.0 million.

Total revenues increased by 15% and adjusted EPS by 24% in the fourth quarter. Leasing grew by 17% in 2025 to reach a billion-dollar-plus year. Full-year management and servicing revenues improved by 12% to over $1.24 billion. Capital markets gained market share in the quarter with investment sales volumes up 56% for the full year, and debt origination volumes up 67% in 2025.

Full-year 2026 outlook: Total revenues expected between $3.7 billion and $3.8 billion, +13.8% at midpoint. Capital markets growth faster than midpoint, management and servicing growth roughly in line, leasing improvement below midpoint. Adjusted EBITDA range $635 million - $675 million, +13% - 20%. Adjusted EPS between $1.82 - $1.92, +12% - 19%.

Risks include macroeconomic, social, political factors impacting expectations. Data privacy risks with property-level data. Market volatility leading to debt maturities and restructuring risks.

Q: Hey, good morning. Morning down there. So two questions. Barry, first, just the big elephant, AI. In a realistic way, can you just tell us what your view is from the clients that you deal with, whether it is renters or occupiers, how they are thinking about AI vis-à-vis their office needs, employment, staffing? We hear all these different stories and just want to hear exactly what the latest thinking is from the office users.

A: I think it is very early to have the full story. I mean, the last two months, AI has really revolutionized itself, but we are still seeing increased activity and increased return to the office. You could possibly look at it that people who are working from home are more at risk than people that come into the office, but nobody knows that at this moment. I see AI as an accelerant. For us, I believe this is really a gift. Having AI as an enabler for the great talent that we have to do more and to expand more, to give them the tools and the data to improve their business and accelerate the opportunities that they will see is really well suited for a company of our size. It actually gives us a moment in time to catch up. We all have a certain amount of proprietary data, and we have been very diligently collecting data over a long period of time. We have an incredible amount of proprietary data. So in terms of margin enhancement, there are certainly opportunities. We are excited about the new business opportunities and the ability to create more agents and human beings; if you have the best human beings, they are going to be the producers of the content and the utilization of that kind of AI. It is really an incredible moment. We are excited about it.

Q: But, Barry, what you are saying is from office-using jobs, you are not seeing any of your clients talk about reducing?

A: We are not. I mean, certainly in the primary markets, we do not expect to see that, but time will ultimately tell.

Q: And then the second question is on your debt book. Capital markets, 2021 was a monstrous year for multifamily, both in aggressive underwriting and low debt costs, and obviously, that stuff is coming due. Do you expect a surge of refinancing and restructuring over the next 12 to 18 months? Or is your view that while there technically should be a surge of maturities, this stuff takes time to work out, and therefore it is not like we are going to see a sudden ramp in all these loans coming due; they will be processed over time? Just trying to gauge what the opportunity is and what that means for you guys as the market addresses the 2021 multifamily debt maturities?

A: In general, there is $2.0 trillion of debt coming due over the next three years, about $600 billion a year, and the market titrates between sales and debt. Every time你 look at a capital event, you decide: Should I finance more? Should I finance less? Should I raise equity? We think that it is right for the market to take action. People have been sitting on portfolios for way longer than they would have liked, and there is a certain amount of fatigue, which I have said once before—I think I said last quarter. We are seeing the investors want to unleash the opportunity and the capital to go play in the new market at new levels with new opportunities where they could capture promotes. There is a lot of activity, and a lot of that is going to be in debt. So I think that there will be a lot of maturities we will be involved in. Thank you.

Q: Thank you very much. There is a robust debate going on about the commercial real estate services business and essentially the risk of the data that they control becoming public. We know from experience that there is a lot of property-level cash flow data that building owners, lenders, servicers, and brokers keep closely held. I am wondering what you see as the risks of that property-level data becoming truly public, and do you see that risk as greater in the low to middle market, more commodity-type assets or elsewhere in the market?

A: Certainly, some data is confidential, and owners are going to protect their data. We are seeing every vendor and every person in the business now asking to be able to use data, so we are very aware of that. But we have collected an enormous amount of proprietary data over years, recognizing some of the data we have is confidential, some we could use as derived data, and it drives opportunities for us to do evaluations on a broader scale, and some of it we will not be able to use. We have no shortage of opportunities to use our data to create value for our client.

Q: Putting that in context of your leading capital markets team and some of the institutional teams you have acquired, do you see that this proprietary data, in combination with AI, advances those star-quality-type teams, or do you think that the younger teams will have a better chance to compete within a company like Newmark Group, Inc.?

A: I think你 basically hit the nail on the head. The reality is both. The older teams have the credibility of the book that they have been selling and the reputation and the gratitude created over selling product for many, many years. The young people on their teams, the talent on their teams, will use AI to increase margin and increase opportunity. If it takes less time to do certain things and you can put your best people in front of clients and spend more time with their clients, you are going to do more business. We think our whole strategy of hiring the best talent and doing more with less plays into the world that we are living in right now, and we think that is an accelerant for us.

Q: Thank you very much.

Q: Thank you for taking my question. Maybe to ask the AI question slightly differently. When I think of Newmark Group, Inc.’s capital markets brokerage business, I think of a platform that operates at the highest tier of transaction size and complexity with the most sophisticated counterparties in the industry. As we think about the disruptive risk of AI, do you believe there is more of a risk to peers or players that are more middle-market focused?

A: Without question, the smaller deals that could be perceived to be more commoditized would be more at risk. But just the same, it is still about contacts with clients. It is still about marketing opportunities, and it is about having a certain amount of time to find those opportunities and then market those opportunities. I think what is going to happen is the process by which those buildings will be marketed—you will be able to create an offering memorandum and do e-blasts, qualify through a list of qualified buyers, and automate CAs and those kinds of things—will just accelerate the opportunities. I think你 will see more business, the same business, done with fewer people, and again, we think that is a good thing for us.

Q: Thank you. That is really helpful. Moving over to capital allocation, you have been very active in making investments in growth and to expand your platform internationally. Does the recent increase in the share repurchase authorization signal that maybe you will be shifting some of your capital allocation towards being more aggressive on share repurchases given where the stock trades today?

A: I think the second part is certainly true—where the stock is today, we will be more aggressive buying back the shares given the outlook and earnings for next year. But we have very low leverage on the balance sheet. We were generating record cash flow in 2025. We will continue to generate a lot of cash flow from the business. We have more room to borrow debt and lever up the balance sheet. So I do not think it is going to slow down in any way our ability to invest.

Q: Barry, we have also been very active. We launched Europe 36 months ago. We have 1,200 people in Europe. When we enter a new market, the new market gets excited, because what we bring to the table is a much more talent-friendly, enabling platform. We have done better than we had originally anticipated, and we have opened up Spain and Italy, and we have done a great deal in Germany, the U.K., and France. We are doing it in the Middle East, and we are doing it in Singapore. We are hiring people, and they want to come work for us. As long as the right people want to come to the platform, we are going to continue to hire the right people. It is a really good way to build a platform. In some cases, although the accounting is a little bit different, when you are hiring brokers and it takes time to ramp up, you have the better shot at getting the plums as opposed to the pits—sometimes when你 buy a company with a lot of people.

Q: Thanks for taking my question. Barry, just want to follow up on that comment you said about some of the hiring outside the U.S., and I am curious—you have previously talked about the lag time as many of those producers are sitting on a garden leave. Where are you in terms of productivity with regards to some of that hiring? Are you around 50%, or is that even less in terms of how many are actually up and running and performing for you?

A: Mitch, it is Mike. I would say it depends on the country because we started different countries at different times. France started probably two years ago—that should be fully ramped up this year in 2026. Germany, we are still ramping, so it probably comes online at full speed in 2027. Italy, we just started, so that will take a year to a year and a half. It really is market dependent, but we are seeing after 12 to 18 months the producers we hired really starting to produce on our platform.

Q: That is good news. France, even though we started two years ago and we had garden leaves, we are probably a year and a few months in operation. We are breakeven in the first year. That is astounding. We had anticipated that it would take us three years to go cash-flow positive; we have done it in a year and three to four months. The U.K.—we came out of the gate, we did not miss a beat. We built a good business in the U.K. The same in Germany—we have an incredible list of talented people that have come on board after our initial hiring of a very senior broker from another firm. We are getting the calls. People are calling; they want to join. They like what我们 are doing and how we are doing it, and there is an element of the strategy of more with less—enabling and empowering talent to do more and not necessarily be crowded—that incidentally will work in the AI environment.

Q: Great. That is helpful. In the last quarter, you guys provided some perspective on the RealFoundations transaction. I am curious about the Altus deal and how it fits into the puzzle here.

A: We had an opportunity to buy a valuation firm in Canada. Canada is a market that we think is a good opportunity for us to grow. We have some brokers up there. We think this can help us recruit more and better talent and continue to grow the business up in Canada. It was part of a software-focused firm, so I think we will be able to really improve the business and show them some love on our platform, and我 think they are going to do great for us.

Q: Right out of the gate, we took the original leader of the company who wanted to join, who left to pursue other avenues but came back. When你 think about our appraisal as prototypical of how we have built this company, we hired one person in appraisal. We now have a business approaching $200 million in appraisals with a profitable margin, and all over the world we are building out the appraisal platform. Many of these institutions give global and regional mandates, so having that platform is a great opportunity for us. As we build out the global platform, which we think is somewhere between 18 and 24 months, we will have our ducks in a row, be in all the markets that we need to be in, and in any opportunity where we get an RFP to pitch that business, the gap between us and winning the business will be diminished precipitously. We expect that organic growth as a result of winning business without cost is going to be an avenue of white space where we will achieve great growth.

Q: Great. Thanks.

Q: Great. Thanks for taking my question. Barry, I appreciate all your comments on AI, and not to belabor the point, but it is the theme of the day. It is probably going much beyond office as well. Looking at你的 industrial and retail leasing businesses, maybe you could talk about some of the top priorities or concerns that you are discussing with clients as they are considering leasing new space. In this AI backdrop, I would imagine there are a lot of elements that Newmark Group, Inc. is helping them navigate regarding power and robotics and flexibility and fulfillment, etc. Any commentary there would be helpful. Thank you.

A: We have a fairly robust data center business. We are well versed in the issues of power, GPUs, the kinds of things that are necessary, and the locational issues with opening data centers. We can advise our clients on how and where to take data centers. We have been doing that for conventional data center business for 20 years—advising people on where, when, and how, and what the criteria for opening data centers are. It is interesting to see the whole data center business for AI that will be aggregated into six or seven major AI companies and how that will impact the world. Our clients—we have always looked at power as an important feature in any of our financial institution lease negotiations. Now it is just a more important point.

Q: Okay. Thank you. Maybe another high-level question. Can you discuss the competitive landscape for talent now and how it has evolved throughout the cycle versus previous cycles and how the recruiting process has changed?

A: In capital markets, we generally have, whatever the vertical is in the geography, usually one team, because if you have more than one team, it becomes like a mosh pit and it is competitive. We think we have now, in many of the markets, actually accomplished our objectives. There are places where we have white space. In leasing, we have plenty of room to grow in certain areas, and we continue to offer an opportunity for a broker who might be at a firm that is really crowded with internal competition and coverage to come on board and not have as much, and that fits in with our model. We would rather see higher revenue per capita and higher revenue per employee and provide the infrastructure and the research and the data to help them do more business. That is our goal. We are not having a problem recruiting.

Q: Great. Thank you.

Q: Thank you very much. Just on the revenue growth outlook, 12% to 15%, could you provide any comments as to your expectations on leasing—whether that should be above or below that—management services, and capital markets? Thanks so much.

A: Sure. As I said in my prepared remarks, Jade, I think we will be above the midpoint in capital markets. The debt market is expected to grow 20% plus next year and sales double digits, so we will perform really well there and continue to take market share. On the management and servicing business, we expect to be roughly in line with the midpoint of the guide. In the leasing business, a little bit below the midpoint of the guide. Thanks very much.