Walker & Dunlop, Inc. Q1 FY2026 earnings call

• Thanked Kelsey Duffy for her 12 years at Walker & Dunlop and her upcoming early retirement. - 2026 Q1 total transaction volume was $13.7 billion, up 94% from Q1 2025. Total revenues were $301 million, up 27% year-over-year. Diluted earnings per share was 46 cents, up 475% over Q1 2025. Adjusted EBITDA grew to $74 million, up 14% year-over-year. - Debt originations totaled $11.8 billion, more than doubling year over year. Agency lending volume was up 109% to $5.2 billion. GSEs origination increased to $4.7 billion, increasing market share. Brokered debt volumes totaled $6.5 billion, up 155% year over year. - Investment sales volume was solid but only up 4% on the quarter to $1.9 billion. Expected investment sales volumes to increase over the year. - Transaction volume per banker broker on a trailing 12-month basis through Q1 26 was $282 million, up from $248 million at the end of 2025. Expected to improve to $300 million by end of 2026. - GSE loan repurchase exposure lowered from $222 million to $192 million. Hopeful annual reviews by Fannie Mae and Freddie Mac will resolve repurchase issues later this year. Strengthened underwriting processes and culture of accountability.

Capital Markets Segment: Transaction volumes increased 94% in Q1 2026, driving segment revenues up 58% to $162 million. Net income was $28 million, up $26 million from the prior year, and adjusted EBITDA was $3.9 million, up from a loss of $13.3 million last year. Personnel expense declined to 68% of segment revenue from 84% last year. Servicing and Asset Management (SAM) Segment: Servicing portfolio grew to $146 billion, generating $85 million of servicing fees, up 4% year over year, contributing to total segment revenues of $138 million, up 5%. Despite $10 million of incremental provision and repurchase-related expenses, net income increased 12% and adjusted EBITDA rose 3% to $112 million.

• Established outlook assuming gradual stabilization in interest rates and increase in capital markets activity over the year. - Geopolitical dynamics introduced uncertainty around inflation and interest rates but limited disruption to transaction activity. Commercial real estate environment remains constructive. - Entering second quarter with healthy pipeline consistent with last year. Confident in ability to achieve guidance and deliver on expectations.

• GSE loan repurchase and indemnification agreements required significant time and effort from servicing and asset management teams. - Geopolitical dynamics introducing uncertainty around inflation and near-term path of interest rates.

Q: Color on mix shift between 10-year and 5-year deals and drivers of transaction volume strength.

A: Saw trend back to more 10-year money but rates up led to more shorter-term deals. Transaction volume strength heavily on refinancing vs acquisitions, with strong investment sales pipeline but sales market sideways due to Iran conflict, leading to more short-term refinancing.

Q: Repurchase loan exposure and HUD origination.

A: $134 million of loans reached indemnification agreements. HUD pipeline strong due to HUD's efforts to streamline business, solid pipeline for 2026 with long maturities and healthy MSRs.

Q: Plan for improving SAM segment profitability.

A: Focus on reducing repurchase loan portfolio, with deals in market aiming to reduce exposure by end of year, and capital markets business feeding servicing portfolio growth.