Core Insights - CBRE Group Inc. reported fourth-quarter 2024 core EPS of $2.32, exceeding the Zacks Consensus Estimate of $2.21 and reflecting a 68.1% year-over-year increase [1] - The company achieved record core earnings and free cash flow, with a 16.2% year-over-year revenue growth to $10.4 billion, surpassing the Zacks Consensus Estimate of $10.28 billion [2] Financial Performance - Net revenues increased 18.3% year-over-year to $6.13 billion, with core EBITDA rising 47.4% to $1.09 billion [3] - For the full year 2024, core EPS was $5.10, up from $3.84 in the prior year, and revenues increased by 11.6% to $35.64 billion [3] Segment Performance - Advisory Services segment revenue grew 19.2% year-over-year to $3.09 billion, exceeding estimates [4] - Global leasing revenue rose 15%, driven by growth in Asia-Pacific, Americas, and Europe, the Middle East & Africa [4] - Global property sales revenues increased 35% year-over-year, with mortgage origination revenues up 37% due to a significant rise in loan origination fees [5] - The GWS segment reported a 15.4% year-over-year revenue increase to $7.04 billion, also surpassing estimates [5] - Facilities management net revenues rose 24%, while project management net revenues increased 9% [6] - Real Estate Investments segment revenues increased 5% to $275 million, with assets under management decreasing by $2.1 billion due to foreign currency movements [7] Balance Sheet and Liquidity - At the end of Q4 2024, CBRE had cash and cash equivalents of $1.11 billion, up from $1.03 billion at the end of Q3 2024 [8] - Total liquidity stood at $4.4 billion, including $1.1 billion in cash and approximately $3.3 billion available for borrowing [9] - The company's net leverage ratio was 0.93X, significantly below the primary debt covenant of 4.25X [9] Share Repurchase and Outlook - During Q4 2024, CBRE repurchased approximately 6.05 million shares for $806 million, with $5.5 billion remaining under its stock repurchase program [10] - For 2025, CBRE projects core EPS in the range of $5.80-$6.10, with the Zacks Consensus Estimate at $6.00 [11]

Financial Data and Key Metrics Changes - Q4 2024 was CBRE's best quarter ever for core earnings and free cash flow, with significant progress in executing its strategy [9][18] - Resilient businesses grew net revenue by 16% in Q4 and 14% for the year, contributing nearly 60% of total SOP for the year [18][19] - Free cash flow exceeded expectations, increasing to more than $1.5 billion for the year, with a conversion rate of almost 100% [31][34] Business Line Data and Key Metrics Changes - Building Operations & Experience and Project Management segments generated $1.4 billion of SOP in 2024, growing organically at a double-digit rate [14][19] - Advisory segment SOP rose 34%, driven by record leasing revenue and a rebound in capital markets [19][25] - GWS segment net revenue grew 18%, with facilities management net revenue increasing by 24% [25][26] Market Data and Key Metrics Changes - Global leasing revenue grew 15%, with U.S. office leasing delivering 28% revenue growth [20][21] - Global property sales revenue growth accelerated to 35%, with strong performance across all asset classes [23] - Mortgage origination business was up 37%, led by a 76% increase in origination fees [24] Company Strategy and Development Direction - CBRE acquired Industrious to enhance flexibility in office space offerings and consolidated building management businesses into one segment [10][11] - The company reorganized into four business segments to leverage synergies and scale advantages [13] - Focus on resilient businesses and investment in development projects, with plans to break ground on over 50 projects in 2025 [32][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in CBRE's future, expecting core EPS growth of 16% in 2025, supported by mid-teens SOP growth across resilient lines of business [36][37] - The company anticipates continued growth in leasing and a rebound in capital markets, despite uncertainties around interest rates [36][55] - Management highlighted the importance of capitalizing on opportunities in the data center sector, which has seen significant profit growth [46][48] Other Important Information - CBRE repurchased over $800 million worth of shares since the end of Q3 2024, reflecting confidence in growth prospects [34][36] - The company expects to narrow the delta between GAAP and core earnings in 2025 due to improved market conditions [44] Q&A Session Summary Question: Can you talk about your guidance around capital markets recovery? - Management noted that transaction activity picked up in Q4 but remains below peak levels, with expectations for continued growth in 2025 [54][56] Question: How much of the growth in the Advisory segment is from revenue versus margin expansion? - Management expects low double-digit revenue growth and margin expansion on top of that [58] Question: What are the long-term growth prospects for the Turner & Townsend business? - Management expects mid-teens growth for the combined project management business, driven by areas with strong tailwinds [66] Question: How do you see the outlook for industrial leasing in 2025? - Management anticipates low single-digit growth in industrial leasing, with expectations for improved conditions in the future [105] Question: Can you comment on the investment management division's growth potential? - Management believes the investment management segment is underappreciated and expects significant growth opportunities in the coming years [80][84] Question: How do you view share repurchase activity in relation to M&A opportunities? - Management prioritizes M&A but will consider share buybacks if M&A opportunities do not materialize [87] Question: What is the outlook for margin expansion in the GWS segment? - Management expects continued margin expansion in GWS due to successful cost management initiatives [91][93] Question: How does CBRE manage talent acquisition in the current environment? - Management indicated that while competition for talent exists, CBRE's stability and brand strength help attract talent [108]

February 13, 2025 Forward-Looking Statements This presentation contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning our business outlook, our business plans and capital allocation strategy and our earnings and cash flow outlook. These statements involve risks and uncertainties that may cause actual results and trends to differ materially from those projected. When citing financial perform ...

Core Insights - CBRE Group reported strong fourth-quarter earnings for 2024, exceeding analyst expectations with adjusted EPS of $2.32, a 68% increase from Q4 2023, and revenue of $10.4 billion, up 16.2% year over year [2][3] Financial Performance - Adjusted EPS for Q4 2024 was $2.32, surpassing the expected $2.23 and increasing from $1.38 in Q4 2023, reflecting a 68.1% year-over-year growth [3] - Revenue reached $10.4 billion, exceeding the forecast of $10.29 billion and rising from $8.95 billion in Q4 2023, marking a 16.2% increase [3] - Net revenue for the quarter was $6.13 billion, up 18.3% from $5.19 billion in Q4 2023 [3] - Core EBITDA was reported at $1.09 billion, a 47.4% increase from $737 million in Q4 2023 [3] Segment Performance - The Advisory Services segment saw net revenue rise by 19.2% in Q4, with a 34.3% increase in operating profit, driven by a 15% increase in global leasing revenue, particularly in Asia-Pacific and U.S. regions [6] - The Global Workplace Solutions segment reported a 15.4% rise in revenue and an 18.5% increase in net revenue, primarily due to demand in technology and healthcare sectors [7] - The Real Estate Investments segment had mixed results, with operating profit growing over 120% due to gains in real estate development, while investment management revenue saw a modest 1% increase [8] Strategic Initiatives - CBRE has focused on strengthening its Project Management and Workplace Solutions sectors, including strategic investments in coworking office specialist Industrious [5] - The company engaged in an $800 million stock repurchase program, indicating confidence in its market positioning [9] Future Outlook - For 2025, CBRE projects Core EPS growth between $5.80 and $6.10, anticipating mid-teens growth as markets recover [10] - The company reported a free cash flow of $1.5 billion in 2024 and maintains a conservative net leverage ratio of 0.93x, indicating a strong financial position for further investment [10]

CBRE Group (CBRE) Q4 2024 Earnings Call February 13, 2025 08:30 AM ET Company Participants Chandni Luthra - Executive Vice President of Investor Relations and Financial Planning & AnalysisBob Sulentic - President and Chief Executive OfficerEmma Giamartino - Global Chief Financial OfficerAnthony Paolone - Executive DirectorJulien Blouin - Vice PresidentRonald Kamdem - Managing Director & Head of US REITs and CRE ResearchAlex Kramm - Managing Director - Equity ResearchJade Rahmani - Managing Director Conferen ...

Core Insights - CBRE Group reported quarterly earnings of $2.32 per share, exceeding the Zacks Consensus Estimate of $2.21 per share, and showing a significant increase from $1.38 per share a year ago, representing an earnings surprise of 4.98% [1] - The company achieved revenues of $10.4 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.25% and up from $8.95 billion year-over-year [2] - CBRE has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The immediate price movement of CBRE's stock will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.90 on revenues of $8.86 billion, while for the current fiscal year, the estimate is $6 on revenues of $39.6 billion [7] Industry Context - The Real Estate - Operations industry, to which CBRE belongs, is currently ranked in the bottom 14% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Results - CBRE Group, Inc. announced preliminary full year 2024 revenue results for the newly created Building Operations & Experience segment[7]. Acquisitions - The Company has entered into a definitive agreement to acquire Industrious National Management Company, LLC, a leading provider of flexible office solutions[9]. Business Segments - The new Building Operations & Experience segment will include Enterprise Facilities Management, Local Facilities Management, Property Management, and Industrious[11]. - The Company's business segments for 2025 will consist of Advisory Services, Building Operations & Experience, Project Management, and Real Estate Investments[11].

Core Viewpoint - CBRE Group, Inc. is set to announce its fourth-quarter and full-year 2024 earnings on February 13, with expectations of strong performance across its business segments, driven by ongoing strategic initiatives and market demand [1][2]. Financial Performance - In the last reported quarter, CBRE achieved an earnings surprise of 13.2%, with double-digit revenue and segment operating profit growth [2]. - Over the past four quarters, CBRE has consistently surpassed the Zacks Consensus Estimate, with an average earnings beat of 14.4% [3]. - The Zacks Consensus Estimate for fourth-quarter 2024 revenues is $10.28 billion, reflecting a year-over-year increase of 14.8% [6]. - The consensus estimate for quarterly net revenues from Advisory Services is $3 billion, up from $2.57 billion year-over-year [6]. - The GWS segment's net revenues are estimated at $2.76 billion, an increase from $2.36 billion in the same quarter last year [6]. - Total revenues from Real Estate Investments are projected at $293.4 million, up from $262 million year-over-year [7]. - The earnings per share (EPS) estimate for the fourth quarter has been raised to $2.21, indicating a 60.1% increase year-over-year [7]. Growth Projections - For 2024, net revenues for the Advisory Services segment are expected to rise by 12% year-over-year [9]. - The GWS segment is projected to see a 13.7% increase in net revenues year-over-year [9]. - Total revenues from Real Estate Investments are anticipated to grow by 17.3% year-over-year [9]. - CBRE projects its 2024 core EPS to be in the range of $4.95-$5.05, with a full-year EPS estimate of $4.99, reflecting a 30% increase year-over-year [10]. Strategic Initiatives - CBRE is focusing on creating a balanced and resilient business model, transitioning to a more contractual business mix, which is expected to positively impact performance [3]. - The company is prioritizing technology investments to enhance efficiency and expand its market share, which is seen as a key factor in addressing current challenges [5]. - The increasing demand for outsourcing services is providing significant opportunities for CBRE to expand its client base and offerings, particularly in the GWS segment [4].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for CBRE Group, driven by higher revenues, with a focus on how actual results will compare to estimates impacting stock price [1][2]. Earnings Expectations - CBRE is expected to report quarterly earnings of $2.20 per share, reflecting a year-over-year increase of +59.4% [3]. - Revenues are projected to reach $10.27 billion, representing a 14.8% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 2.35% lower in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP of +1.67% suggests analysts have recently become more optimistic about CBRE's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - CBRE currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, CBRE exceeded the expected earnings of $1.06 per share by delivering $1.20, resulting in a surprise of +13.21% [12]. - Over the past four quarters, CBRE has consistently beaten consensus EPS estimates [13]. Industry Comparison - Zillow, another player in the real estate operations industry, is expected to post earnings of $0.29 per share, with a year-over-year change of +45% and revenues of $540.64 million, up 14.1% [17]. - Zillow's higher Most Accurate Estimate has resulted in an Earnings ESP of 15.52%, combined with a Zacks Rank of 2, indicating a strong likelihood of beating the consensus EPS estimate [18].

Core Viewpoint - Growth investors are interested in stocks with above-average financial growth, but identifying such stocks can be challenging due to associated risks and volatility [1] Group 1: Company Overview - CBRE Group (CBRE) is currently recommended as a growth stock by the Zacks Growth Style Score system, which evaluates a company's growth prospects beyond traditional metrics [2] Group 2: Earnings Growth - The historical EPS growth rate for CBRE is 3.9%, but projected EPS growth for this year is 21.5%, surpassing the industry average of 19.1% [5] Group 3: Asset Utilization - CBRE has an asset utilization ratio (sales-to-total-assets ratio) of 1.46, indicating that the company generates $1.46 in sales for every dollar in assets, significantly higher than the industry average of 0.28 [6] Group 4: Sales Growth - The company's sales are expected to grow by 11.5% this year, compared to the industry average of 7.7% [7] Group 5: Earnings Estimate Revisions - The current-year earnings estimates for CBRE have been revised upward, with the Zacks Consensus Estimate increasing by 0.7% over the past month [8] Group 6: Overall Positioning - CBRE holds a Zacks Rank of 2 (Buy) and a Growth Score of B, positioning it well for potential outperformance in the market [10]