Financial Data and Key Metrics Changes - Total transaction volume for Q2 reached $14 billion, up 65% year-over-year, indicating a strong recovery in commercial real estate activity [10][18] - Revenue grew by 18%, while diluted earnings per share increased by 48% to $0.99, reflecting the impact of higher transaction volumes [11][18] - Adjusted EBITDA declined by 5% and adjusted core EPS fell by 7%, primarily due to a 100 basis point decrease in short-term rates affecting escrow earnings [13][18] Business Line Data and Key Metrics Changes - The Capital Markets segment saw a 46% revenue growth year-over-year, driven by increased debt financing and property sales volumes [19] - GSE lending volume reached $4.9 billion, the highest in 11 quarters, contributing to an increase in market share from 10.3% to 11.4% [13][19] - HUD lending volumes grew by 55% to $288 million, and appraisal revenues increased by 61% [16][19] Market Data and Key Metrics Changes - The multifamily sector is positioned for growth due to a significant gap between renting and homeownership costs, with record absorption of 794,000 units over the past year [8][10] - The occupancy rate in the multifamily industry is currently at 96%, indicating strong demand and potential for rising rents [10][19] Company Strategy and Development Direction - The company aims to achieve an average of $200 million in transaction volume per banker or broker, with current production at $189 million [28][29] - Expansion into European markets is a strategic focus, with plans to build operations and capitalize on investment flows [44][47] - Continued investment in technology and brand development is emphasized to enhance competitive positioning in the market [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Q3 pipeline, indicating sustained market velocity and a shift from a wait-and-see attitude to a proactive approach among clients [41][42] - The company anticipates that the momentum from Q2 will carry into the second half of the year, supported by strong demand and liquidity in commercial real estate [27][28] Other Important Information - The company ended the quarter with $234 million in cash, reflecting strong cash generation capabilities [25] - A quarterly dividend of $0.67 per share was approved, marking seven years of steady dividend growth [25] Q&A Session Summary Question: How does the pipeline look for Q3 and potential growth rates for the second half? - Management indicated a strong Q3 pipeline with sustained market activity and confidence in achieving guidance for the year [41][42] Question: What is the strategy for the European initiative? - The strategy involves building operations in Europe to capture investment flows and expand the Walker and Dunlop brand globally [44][47]

Financial Data and Key Metrics Changes - Total transaction volume for Q2 reached $14 billion, up 65% year-over-year, with revenue growth of 18% and diluted earnings per share of $0.99, up 48% year-over-year [10][11][17] - Adjusted EBITDA declined 5% in the quarter, while adjusted core EPS declined 7%, largely due to a 100 basis point decrease in short-term rates [12][13] - Year-to-date diluted earnings per share increased to $1.07, up 5% over 2024, while adjusted EBITDA totaled $142 million, down 9% from 2024 [26] Business Line Data and Key Metrics Changes - The Capital Markets segment saw significant momentum with 68% more debt financing volume and 51% more property sales volume than the prior year, resulting in segment revenues growing 46% year-over-year [18][19] - The Servicing and Asset Management (SAM) segment generated servicing fees of $84 million, up 4% year-over-year, but total SAM revenues declined 5% due to a 12% decrease in placement fees [20][21] - HUD lending volumes grew 55% to $288 million in Q2, and appraisal revenues increased by 61% [15][20] Market Data and Key Metrics Changes - The multifamily sector is well-positioned with record absorption of 227,000 units in the past year, driven by a widening gap between renting and homeownership costs [8][9] - The occupancy rate in the multifamily industry is currently at 96%, indicating strong demand [10] - GSE market share increased to 11.4%, up from 10.3% at the end of the previous year, with both Fannie Mae and Freddie Mac remaining active in the market [13][14] Company Strategy and Development Direction - The company aims to achieve an average of $200 million in transaction volume per banker or broker, with current production at $189 million per banker broker [28] - Expansion into European markets is a strategic focus, with plans to build operations and capitalize on investment flows into Europe [44][45] - The company is committed to growing its affordable housing platform and increasing capital deployment in its investment management business [32][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Q3 pipeline, indicating sustained market velocity and a shift from a wait-and-see attitude to a proactive approach among clients [41][42] - The company anticipates continued strong demand for commercial real estate assets and positive underlying market fundamentals [27] - Management emphasized the importance of teamwork and collaboration in achieving future growth and maintaining a competitive edge [35][36] Other Important Information - The company ended the quarter with $234 million in cash, reflecting strong cash generation and rebounding capital markets activity [25] - A quarterly dividend of $0.67 per share was approved, marking seven years of steady dividend growth [25] Q&A Session Summary Question: How does the pipeline look for Q3 and potential growth rates for the second half? - Management indicated that the Q3 pipeline looks great, with sustained market velocity and no signs of a slowdown in transaction volumes [41][42] Question: What is the strategy for the European initiative? - The strategy involves building operations in Europe to capture investment flows and expand the Walker and Dunlop brand globally, with a focus on long-term growth [44][45]

Q2 2025 Financial Performance - Total revenues increased by 18% from Q2 2024, reaching $319.24 million[20] - Diluted EPS increased by 48% from $0.67 in Q2 2024 to $0.99 in Q2 2025[20] - Adjusted EBITDA decreased by 5% from $80.931 million in Q2 2024 to $76.811 million in Q2 2025[20] - Adjusted Core EPS decreased by 7% from $1.23 in Q2 2024 to $1.15 in Q2 2025[20] Capital Markets Segment - Consolidated total transaction volume increased by 65% year-over-year, reaching $13.951 billion in Q2 2025 compared to $8.448 billion in Q2 2024[27] - Total revenues increased by 46% year-over-year, reaching $172.791 million in Q2 2025 compared to $118.170 million in Q2 2024[27] - Net income increased by 200% year-over-year, reaching $33.142 million in Q2 2025 compared to $11.039 million in Q2 2024[27] - Adjusted EBITDA decreased by 116% year-over-year, reaching $1.323 million in Q2 2025 compared to -$8.532 million in Q2 2024[27] Servicing & Asset Management (SAM) Segment - Total revenues decreased by 5% year-over-year, reaching $140.735 million in Q2 2025 compared to $148.232 million in Q2 2024[32] - Net income decreased by 7% year-over-year, reaching $37.541 million in Q2 2025 compared to $40.432 million in Q2 2024[32] - Adjusted EBITDA decreased by 10% year-over-year, reaching $111.931 million in Q2 2025 compared to $124.502 million in Q2 2024[32]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) Presents the company's unaudited condensed consolidated financial statements and related notes for the reported periods [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including balance sheets, income, cash flows, equity, and detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Provides a summary of the company's assets, liabilities, and equity at key reporting dates Balance Sheet Summary (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $4,675,040 | $4,381,993 | $293,047 | 6.7% | | Total Liabilities | $2,913,242 | $2,622,130 | $291,112 | 11.1% | | Total Stockholders' Equity | $1,750,018 | $1,747,863 | $2,155 | 0.1% | | Total Equity | $1,761,798 | $1,759,863 | $1,935 | 0.1% | [Condensed Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Details the company's revenues, expenses, and net income for the three and six months ended June 30 Income Statement Summary (Three Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Total Revenues | $319,240 | $270,676 | $48,564 | 17.9% | | Total Expenses | $272,866 | $242,479 | $30,387 | 12.5% | | Income from Operations | $46,374 | $28,197 | $18,177 | 64.5% | | Walker & Dunlop Net Income | $33,952 | $22,663 | $11,289 | 49.8% | | Basic EPS | $1.00 | $0.67 | $0.33 | 49.3% | | Diluted EPS | $0.99 | $0.67 | $0.32 | 47.8% | Income Statement Summary (Six Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Total Revenues | $556,607 | $498,735 | $57,872 | 11.6% | | Total Expenses | $504,989 | $456,859 | $48,130 | 10.5% | | Income from Operations | $51,618 | $41,876 | $9,742 | 23.3% | | Walker & Dunlop Net Income | $36,706 | $34,529 | $2,177 | 6.3% | | Basic EPS | $1.08 | $1.02 | $0.06 | 5.9% | | Diluted EPS | $1.07 | $1.02 | $0.05 | 4.9% | [Consolidated Statements of Changes in Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines the changes in total equity, including net income, dividends, and stock transactions - **Total Equity** increased from **$1,759,863 thousand** at December 31, 2024, to **$1,761,798 thousand** at June 30, 2025. **Walker & Dunlop net income** contributed **$36,706 thousand**, while cash dividends paid totaled **$45,859 thousand**. Stock-based compensation added **$12,059 thousand**, and common stock repurchases reduced equity by **$9,232 thousand**[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for the reported periods Cash Flow Summary (Six Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Net cash provided by (used in) operating activities | $(519,560) | $(199,449) | $(320,111) | 160.5% | | Net cash provided by (used in) investing activities | $(61,926) | $(29,611) | $(32,315) | 109.1% | | Net cash provided by (used in) financing activities | $546,356 | $119,147 | $427,209 | 358.6% | | Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents | $(35,130) | $(109,913) | $74,783 | (68.0)% | | Total cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | $292,768 | $281,490 | $11,278 | 4.0% | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of significant accounting policies and financial statement items [NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION](index=8&type=section&id=NOTE%201%E2%80%94ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) Describes the company's structure, operations, and the basis for financial statement presentation - **Walker & Dunlop, Inc.** is a holding company operating primarily through **Walker & Dunlop, LLC**, a leading commercial real estate services and finance company in the U.S[22](index=22&type=chunk) - The Company originates, sells, and services commercial real estate debt and equity financing products, provides multifamily property sales brokerage and valuation, engages in commercial real estate investment management (focused on affordable housing via LIHTC syndication), offers housing market research, and delivers real estate-related investment banking and advisory services[22](index=22&type=chunk) - **Agency lending products** are offered through Fannie Mae, Freddie Mac (GSEs), Ginnie Mae, and HUD (Agencies). **Debt brokerage products** are for life insurance companies, commercial banks, and other institutional investors[23](index=23&type=chunk) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Details the company's key accounting policies, including credit loss provisions and revenue recognition Provision (Benefit) for Credit Losses (Three Months Ended June 30) | Component | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------- | :-------------------- | :-------------------- | :------- | | Provision (benefit) for loan losses | $500 | $(17) | $517 | N/A | | Provision (benefit) for risk-sharing obligations | $1,320 | $353 | $967 | 273.9% | | Provision (benefit) for loan credit losses | $1,820 | $336 | $1,484 | 441.7% | | Provision (benefit) for other credit losses | $0 | $2,600 | $(2,600) | (100.0)% | | **Total Provision (benefit) for credit losses** | **$1,820** | **$2,936** | **$(1,116)** | **(38.0)%** | Provision (Benefit) for Credit Losses (Six Months Ended June 30) | Component | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------- | :-------------------- | :-------------------- | :------- | | Provision (benefit) for loan losses | $500 | $(16) | $516 | N/A | | Provision (benefit) for risk-sharing obligations | $5,032 | $(1,124) | $6,156 | N/A | | Provision (benefit) for loan credit losses | $5,532 | $(1,140) | $6,672 | N/A | | Provision (benefit) for other credit losses | $0 | $4,600 | $(4,600) | (100.0)% | | **Total Provision (benefit) for credit losses** | **$5,532** | **$3,460** | **$2,072** | **59.9%** | - The Company has credit risk exclusively on loans secured by multifamily real estate, with no exposure to other commercial real estate sectors[26](index=26&type=chunk) - The Company is obligated to repurchase GSE loans if certain representations and warranties are breached. As of June 30, 2025, four loans were repurchased, and one loan with an outstanding balance of **$23.2 million** must be repurchased by March 29, 2026. All repurchased/indemnified loans are delinquent and non-accrual[28](index=28&type=chunk) - **Net warehouse interest income (expense)** for the three months ended June 30, 2025, was **$(1,760) thousand**, compared to **$(1,584) thousand** in 2024. For the six months, it was **$(2,546) thousand** in 2025, compared to **$(2,700) thousand** in 2024[33](index=33&type=chunk) - Co-broker fees netted against Loan origination and debt brokerage fees were **$4.5 million** (Q2 2025) vs **$2.0 million** (Q2 2024) and **$6.5 million** (YTD 2025) vs **$4.6 million** (YTD 2024)[34](index=34&type=chunk) - **Total revenues** derived from contracts with customers increased to **$77.7 million** for Q2 2025 (from **$68.4 million** in Q2 2024) and **$135.7 million** for YTD 2025 (from **$120.8 million** in YTD 2024)[36](index=36&type=chunk) [NOTE 3—MORTGAGE SERVICING RIGHTS](index=11&type=section&id=NOTE%203%E2%80%94MORTGAGE%20SERVICING%20RIGHTS) Explains the valuation, changes, and sensitivities of mortgage servicing rights - The fair value of **Mortgage Servicing Rights (MSRs)** was **$1.4 billion** as of both June 30, 2025, and December 31, 2024[39](index=39&type=chunk) MSR Key Economic Assumptions Sensitivities (June 30, 2025) | Assumption Change | Decrease in Fair Value (in millions) | | :---------------------- | :--------------------------------- | | 100 bps increase in Discount Rate | $40.3 | | 200 bps increase in Discount Rate | $77.9 | | 50 bps decrease in Placement Fee Rate | $49.1 | | 100 bps decrease in Placement Fee Rate | $98.3 | Roll Forward of MSRs (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :---------------------- | :-------- | :-------- | :--------- | :--------- | | Beginning balance | $825,761 | $881,834 | $852,399 | $907,415 | | Additions | $47,068 | $21,172 | $73,911 | $47,582 | | Amortization | $(53,264) | $(50,495) | $(105,086) | $(101,026) | | Pre-payments & write-offs | $(1,751) | $(1,680) | $(3,410) | $(3,140) | | Ending balance | $817,814 | $850,831 | $817,814 | $850,831 | - **Net carrying value of MSRs** was **$817.8 million** as of June 30, 2025, down from **$852.4 million** as of December 31, 2024[40](index=40&type=chunk) [NOTE 4—ALLOWANCE FOR RISK-SHARING OBLIGATIONS](index=12&type=section&id=NOTE%204%E2%80%94ALLOWANCE%20FOR%20RISK-SHARING%20OBLIGATIONS) Discusses the allowance for credit losses on risk-sharing obligations and related portfolio details - The Company records an estimate for **Current Expected Credit Losses (CECL)** for its Fannie Mae at-risk servicing portfolio and Freddie Mac SBLs[42](index=42&type=chunk) Roll Forward of Allowance for Risk-Sharing Obligations (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :-------- | :-------- | :--------- | :--------- | | Beginning balance | $31,871 | $30,124 | $28,159 | $31,601 | | Provision (benefit) for risk-sharing obligations | $1,320 | $353 | $5,032 | $(1,124) | | Ending balance | $33,191 | $30,477 | $33,191 | $30,477 | - The at-risk Fannie Mae servicing portfolio UPB was **$64.7 billion** as of Q2 2025, up from **$59.5 billion** in Q2 2024[43](index=43&type=chunk) - Collateral-based reserves for individually evaluated loans (5 Fannie Mae DUS, 3 Freddie Mac SBLs) totaled **$8.6 million** as of June 30, 2025, compared to **$4.0 million** as of December 31, 2024[44](index=44&type=chunk) - **Maximum quantifiable contingent liability** for Fannie Mae DUS guaranties was **$13.4 billion** as of June 30, 2025, up from **$12.2 billion** in 2024[45](index=45&type=chunk) [NOTE 5—SERVICING](index=13&type=section&id=NOTE%205%E2%80%94SERVICING) Provides information on the total loan servicing portfolio and custodial deposit accounts - **Total UPB of loans serviced** for institutional investors was **$137.3 billion** as of June 30, 2025, an increase from **$135.3 billion** as of December 31, 2024[46](index=46&type=chunk) - **Custodial deposit accounts** (escrow deposits) totaled **$2.7 billion** as of both June 30, 2025, and December 31, 2024[47](index=47&type=chunk) [NOTE 6—DEBT](index=13&type=section&id=NOTE%206%E2%80%94DEBT) Details the company's various debt instruments, facilities, and covenant compliance - As of June 30, 2025, the Company had **$5.3 billion** in **total Agency Warehouse Facilities capacity** (**$1.65 billion** committed, **$3.65 billion** uncommitted) with an **outstanding balance** of **$1.157 billion**. Interest rates are based on SOFR plus a spread[49](index=49&type=chunk) - Maturity dates for Agency Warehouse Facilities 2, 3, and 4 were extended to April 10, 2026, May 15, 2026, and June 22, 2026, respectively[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - The Company has a **$450.0 million Term Loan** (balance **$448.9 million** as of June 30, 2025) and a **$50.0 million revolving credit facility** (no outstanding balance)[54](index=54&type=chunk) - The Company also has **$400.0 million** aggregate principal amount of **Senior Unsecured Notes** as of June 30, 2025[54](index=54&type=chunk) - The Company is in compliance with all financial covenants for warehouse facilities and notes payable as of June 30, 2025[55](index=55&type=chunk) [NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS](index=14&type=section&id=NOTE%207%E2%80%94GOODWILL%20AND%20OTHER%20INTANGIBLE%20ASSETS) Presents the balances and changes in goodwill and other intangible assets - **Goodwill balance** was **$868.7 million** as of June 30, 2025, unchanged from December 31, 2024. **Accumulated goodwill impairment** was **$95.0 million** as of June 30, 2025, up from **$62.0 million** as of June 30, 2024[10](index=10&type=chunk)[56](index=56&type=chunk) - **Net carrying value of other intangible assets** was **$149.4 million** as of June 30, 2025, down from **$156.9 million** as of December 31, 2024[57](index=57&type=chunk)[58](index=58&type=chunk) - **Contingent consideration liabilities** decreased to **$19.7 million** as of June 30, 2025, from **$30.5 million** as of December 31, 2024, due to payments. The last earnout period for contingent consideration ends in Q3 2027[60](index=60&type=chunk) [NOTE 8—FAIR VALUE MEASUREMENTS](index=15&type=section&id=NOTE%208%E2%80%94FAIR%20VALUE%20MEASUREMENTS) Explains the fair value hierarchy and valuation of financial assets and liabilities - The Company uses a fair value hierarchy (Level 1, 2, 3) for valuation inputs, with MSRs measured at fair value at inception and thereafter on a nonrecurring basis[62](index=62&type=chunk)[65](index=65&type=chunk) - The Company entered into an interest rate swap for its Senior Notes in Q1 2025, converting fixed interest payments to variable (SOFR-based) and designating it as a fair value hedge[64](index=64&type=chunk) Financial Assets and Liabilities Measured at Fair Value (June 30, 2025, in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :-------- | :---------- | :-------- | :---------- | | **Assets:** | | | | | | Loans held for sale | — | $1,177,837 | — | $1,177,837 | | Pledged securities | $17,966 | $200,469 | — | $218,435 | | Derivative assets | — | $52,370 | — | $52,370 | | **Liabilities:** | | | | | | Derivative liabilities | — | $16,208 | — | $16,208 | | Notes payable — Senior Notes | — | $399,572 | — | $399,572 | | Contingent consideration liabilities | — | — | $19,664 | $19,664 | - **Contingent consideration liabilities** (Level 3) are valued using a Monte Carlo Simulation with a **weighted-average probability of earnout achievement of 8%**[74](index=74&type=chunk) - **Total financial assets at fair value** were **$1,755.8 million** (June 30, 2025) vs **$1,355.1 million** (Dec 31, 2024). **Total financial liabilities at fair value** were **$2,077.0 million** (June 30, 2025) vs **$1,651.3 million** (Dec 31, 2024)[75](index=75&type=chunk) [NOTE 9—FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES](index=21&type=section&id=NOTE%209%E2%80%94FANNIE%20MAE%20COMMITMENTS%20AND%20PLEDGED%20SECURITIES) Outlines Fannie Mae commitments, pledged securities, and liquidity requirements - The Company is required to secure Fannie Mae DUS risk-sharing obligations by assigning restricted cash and pledged securities[87](index=87&type=chunk) - As of June 30, 2025, the Company held **$218.4 million** in pledged securities (**$18.0 million** in pledged cash/cash equivalents, **$200.5 million** in Agency MBS)[90](index=90&type=chunk) - **Reserve requirements** for the DUS loan portfolio will require funding **$75.9 million** in additional restricted liquidity over the next 48 months[88](index=88&type=chunk) - The Company's **net worth** was **$1.0 billion** (vs **$337.4 million** requirement) and **operational liquidity** was **$220.2 million** (vs **$67.2 million** requirement) as of June 30, 2025, both in compliance[89](index=89&type=chunk) - **Agency MBS fair value** was **$200.5 million** (June 30, 2025) vs **$183.4 million** (Dec 31, 2024)[92](index=92&type=chunk) [NOTE 10—EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY](index=23&type=section&id=NOTE%2010%E2%80%94EARNINGS%20PER%20SHARE%20AND%20STOCKHOLDERS%27%20EQUITY) Details the calculation of earnings per share and changes in stockholders' equity EPS Calculation (Three Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Walker & Dunlop Net Income | $33,952 | $22,663 | | Net Income applicable to common stockholders | $33,162 | $22,149 | | Basic EPS | $1.00 | $0.67 | | Diluted EPS | $0.99 | $0.67 | EPS Calculation (Six Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Walker & Dunlop Net Income | $36,706 | $34,529 | | Net Income applicable to common stockholders | $35,829 | $33,719 | | Basic EPS | $1.08 | $1.02 | | Diluted EPS | $1.07 | $1.02 | - The Board approved a **$75.0 million stock repurchase program** in February 2025, with **$75.0 million remaining capacity** as of June 30, 2025. No shares were repurchased under this program in the first six months of 2025[98](index=98&type=chunk)[281](index=281&type=chunk) - **Quarterly cash dividend** of **$0.67 per share** paid in Q1 and Q2 2025. A **$0.67 per share dividend** was declared for Q3 2025[99](index=99&type=chunk)[280](index=280&type=chunk) [NOTE 11—SEGMENTS](index=24&type=section&id=NOTE%2011%E2%80%94SEGMENTS) Describes the company's operating segments and their financial performance contributions - The Company operates through three reportable segments: Capital Markets (CM), Servicing & Asset Management (SAM), and Corporate[102](index=102&type=chunk) - **Capital Markets (CM)** provides commercial real estate finance products (Agency lending, debt brokerage, property sales, appraisal, valuation, investment banking, housing market research). It temporarily funds loans held for sale and earns net interest income, recognizing the fair value of expected net cash flows from servicing[102](index=102&type=chunk) - **Servicing & Asset Management (SAM)** services and asset-manages loan portfolios (Agency, brokered, principal lending) and manages third-party capital in tax credit equity funds and other commercial real estate, earning servicing fees and asset management fees[102](index=102&type=chunk) - Corporate primarily handles treasury operations, liquidity and funding management, corporate debt, equity-method investments, and various support functions (accounting, IT, legal, HR, marketing, internal audit). Costs from support functions are not allocated to CM or SAM[102](index=102&type=chunk) Segment Net Income (Three Months Ended June 30, 2025) | Segment | Net Income (loss) (in thousands) | | :---------------------- | :------------------------------- | | Capital Markets | $33,142 | | Servicing & Asset Management | $37,541 | | Corporate | $(36,731) | | **Consolidated** | **$33,952** | Segment Net Income (Six Months Ended June 30, 2025) | Segment | Net Income (loss) (in thousands) | | :---------------------- | :------------------------------- | | Capital Markets | $35,502 | | Servicing & Asset Management | $56,667 | | Corporate | $(55,463) | | **Consolidated** | **$36,706** | Segment Total Assets (June 30, 2025) | Segment | Total Assets (in thousands) | | :---------------------- | :-------------------------- | | Capital Markets | $1,851,055 | | Servicing & Asset Management | $2,337,205 | | Corporate | $486,780 | | **Consolidated** | **$4,675,040** | [NOTE 12—VARIABLE INTEREST ENTITIES](index=29&type=section&id=NOTE%2012%E2%80%94VARIABLE%20INTEREST%20ENTITIES) Discusses the company's involvement with consolidated and nonconsolidated variable interest entities - The Company is involved with **Variable Interest Entities (VIEs)** for tax credit funds and affordable housing development[114](index=114&type=chunk) Consolidated VIEs Assets & Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total assets of consolidated VIEs | $37,117 | $76,264 | | Total liabilities of consolidated VIEs | $10,523 | $55,527 | Nonconsolidated VIEs Interests (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total interests in nonconsolidated VIEs | $246,012 | $363,822 | | Total commitments to fund nonconsolidated VIEs | $168,863 | $274,975 | | Maximum exposure to losses | $246,012 | $363,822 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of financial condition, operations, segment performance, market factors, strategic focus, and accounting estimates [Forward-Looking Statements](index=30&type=section&id=Forward-Looking%20Statements) Highlights statements about future events and strategies, subject to various risks and uncertainties - The report contains forward-looking statements regarding future events, trends, and strategies, which are subject to numerous known and unknown risks and uncertainties[119](index=119&type=chunk)[120](index=120&type=chunk) - Key forward-looking subjects include the future of GSEs, interest rate environment, growth strategy, financial condition, funding arrangements, dividend payments, personnel retention, competition, governmental regulations, commercial real estate market trends, and capital market volatility[121](index=121&type=chunk) [Business Overview](index=31&type=section&id=Business%20Overview) Describes the company's core services, market position, and strategic use of technology - **Walker & Dunlop** is a leading commercial real estate services, finance, and technology company in the U.S., offering multifamily lending, property sales, appraisal, valuation, research, debt brokerage, investment management, and affordable housing services[122](index=122&type=chunk) - The Company leverages technology to enhance customer experience, identify opportunities, and drive internal efficiencies, resulting in **58% of refinancing volumes from new loans** and **17% of total transaction volumes from new customers** for the six months ended June 30, 2025[122](index=122&type=chunk) - It is one of the largest service providers to multifamily operators, originating, selling, and servicing loans through Agencies (GSEs, HUD) and brokering loans to institutional investors[123](index=123&type=chunk) - Strategic focus areas include growing the **small-balance multifamily lending platform** and **appraisal platform (Apprise)** through technology and acquisitions[124](index=124&type=chunk) [Segments](index=31&type=section&id=Segments) Details the activities, revenue streams, and risk profiles of the Capital Markets and Servicing & Asset Management segments - **Capital Markets (CM)** offers Agency lending (multifamily, manufactured housing, student, affordable, seniors, small-balance loans), debt brokerage, property sales, housing market research (Zelman & Associates), and appraisal/valuation services (Apprise)[127](index=127&type=chunk)[128](index=128&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) - **Servicing & Asset Management (SAM)** manages loan servicing for Agency and brokered loans, and third-party capital in tax credit equity funds (LIHTC syndication) and other commercial real estate. Earns servicing fees, placement fees on escrow deposits, and asset management fees[140](index=140&type=chunk)[141](index=141&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - Corporate handles treasury operations, liquidity and funding management, corporate debt, equity-method investments, and various support functions (accounting, IT, legal, HR, marketing, internal audit)[147](index=147&type=chunk) - The Company retains servicing rights and asset management responsibilities for most Agency loans, generating cash revenues from servicing fees and placement fees on escrow deposits[141](index=141&type=chunk) - Risk-sharing obligations exist for Fannie Mae DUS loans, where the Company absorbs losses on a tiered formula, typically up to **20%** of the original UPB, with higher servicing fees compensating for this risk[142](index=142&type=chunk)[143](index=143&type=chunk) [Basis of Presentation](index=36&type=section&id=Basis%20of%20Presentation) Explains the preparation of condensed consolidated financial statements in accordance with GAAP - Condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions[21](index=21&type=chunk)[149](index=149&type=chunk) - All accounts of the Company and its wholly-owned subsidiaries are included, with intercompany transactions eliminated[148](index=148&type=chunk) [Critical Accounting Estimates](index=36&type=section&id=Critical%20Accounting%20Estimates) Discusses key accounting estimates for MSRs, risk-sharing obligations, and goodwill impairment - **Mortgage Servicing Rights (MSRs)** are recorded at fair value at loan sale, based on estimated net cash flows, discount rates (**8-14%**), placement fees, prepayment speeds, and servicing costs. The model assumes no prepayment before expiration of provisions and full prepayment thereafter[150](index=150&type=chunk) - **Allowance for Risk-Sharing Obligations** is a reserve liability for Fannie Mae at-risk and Freddie Mac SBL servicing portfolios, estimated using the **Current Expected Credit Losses (CECL)** model. Key inputs include runoff rate, weighted-average annual loss rate (10-year look-back), and a one-year forecast period[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Goodwill is reviewed for impairment annually (October 1) and between annual analyses if events indicate fair value is below carrying value, requiring management judgments and assumptions on projected cash flows and discount rates[160](index=160&type=chunk) - **Goodwill impairment** of **$33.0 million** was attributed to the Capital Markets segment in Q4 2024 due to challenging macroeconomic conditions[160](index=160&type=chunk) [Overview of Current Business Environment](index=38&type=section&id=Overview%20of%20Current%20Business%20Environment) Analyzes macroeconomic factors, interest rate trends, and their impact on the commercial real estate market - The Commercial Real Estate (CRE) sector has experienced a challenging environment shaped by uncertain, and at times volatile, interest rates that have directly impacted the cost and availability of capital over the last three years[162](index=162&type=chunk) - Broad tariffs announced on April 2, 2025 ("Liberation Day") caused **market turmoil**, with the S&P 500 falling and Treasury yields fluctuating. **Tariffs were paused** on April 9, 2025, but market caution remains[163](index=163&type=chunk) - The FOMC began decreasing its target **Federal Funds Rate** in September 2024, lowering it to **4.25%-4.50%** by December 2024. Rates are expected to remain elevated, stabilizing interest rates and accelerating transaction activity in Q2 2025[164](index=164&type=chunk) - **GSEs deployed $120 billion** in 2024 (up from **$101 billion** in 2023), with **combined lending caps of $146 billion** for 2025 (**22% increase**). **Fannie Mae lending volumes are up 52% YTD**, and **Freddie Mac is up 9%**[165](index=165&type=chunk) - Multifamily **rent growth** slowed to approximately **2%** in 2024 due to record unit completions, but absorption remained strong. **Property values declined 19.6%** from their peak but are **11.9%** above pre-COVID levels. **New construction starts** have fallen dramatically[166](index=166&type=chunk) - The national **unemployment rate** remained low at **4.1%** at June 30, 2025, and **multifamily vacancies** stabilized around **4.4%**. **Transaction volumes** increased by **65%** in Q2 2025 compared to the same quarter last year[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - **Capital Markets segment net income increased 200% to $33.1 million** in Q2 2025. Servicing & Asset Management managed portfolio grew **4% to $156.0 billion**, but revenues declined **5%** due to lower short-term interest rates impacting placement fees[169](index=169&type=chunk)[170](index=170&type=chunk) [Consolidated Results of Operations](index=40&type=section&id=Consolidated%20Results%20of%20Operations) Presents a consolidated view of the company's revenues, expenses, and key performance metrics Key Performance Metrics (Three Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :---------------------- | :----- | :----- | :----- | :------- | | Total Transaction Volume | $13,951,810 | $8,448,501 | $5,503,309 | 65.1% | | Operating Margin | 15% | 10% | 5% | 50.0% | | Return on Equity | 8% | 5% | 3% | 60.0% | | Walker & Dunlop Net Income | $33,952 | $22,663 | $11,289 | 49.8% | | Diluted EPS | $0.99 | $0.67 | $0.32 | 47.8% | | Personnel expenses (% of total revenues) | 51% | 49% | 2% | 4.1% | Key Performance Metrics (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :---------------------- | :----- | :----- | :----- | :------- | | Total Transaction Volume | $20,987,742 | $14,842,960 | $6,144,782 | 41.4% | | Operating Margin | 9% | 8% | 1% | 12.5% | | Return on Equity | 4% | 4% | 0% | 0.0% | | Walker & Dunlop Net Income | $36,706 | $34,529 | $2,177 | 6.3% | | Diluted EPS | $1.07 | $1.02 | $0.05 | 4.9% | | Personnel expenses (% of total revenues) | 51% | 49% | 2% | 4.1% | - **Total revenues** increased by **$48.6 million (18%)** in Q2 2025, driven by increases in loan origination and debt brokerage fees (**+44%**), fair value of expected net cash flows from servicing (**+59%**), servicing fees (**+4%**), and property sales broker fees (**+33%**). This was partially offset by decreases in investment management fees (**-49%**) and placement fees and other interest income (**-12%**)[178](index=178&type=chunk) - **Total expenses** increased by **$30.4 million (13%)** in Q2 2025, primarily due to a **22% increase in personnel expense** (driven by higher commission costs) and a **5% increase in amortization and depreciation**. Interest expense on corporate debt decreased by **6%** due to lower average interest rates[179](index=179&type=chunk) - **Income tax expense** increased **57%** year-over-year in Q2 2025, driven by a **64% increase in income from operations** and a **$0.1 million** tax shortfall (compared to a **$0.4 million** benefit in Q2 2024)[180](index=180&type=chunk) [Non-GAAP Financial Measure (Adjusted EBITDA)](index=46&type=section&id=Non-GAAP%20Financial%20Measure) Defines and reconciles Adjusted EBITDA, a non-GAAP measure used for performance evaluation - **Adjusted EBITDA** is a non-GAAP measure used to evaluate operating performance, compare with forecasts, and benchmark against competitors[189](index=189&type=chunk) - It represents net income before income taxes, corporate debt interest expense, amortization and depreciation, adjusted for credit losses, net write-offs, stock-based compensation, MSR income, write-off of unamortized issuance costs, goodwill impairment, and contingent consideration liability fair value adjustments[188](index=188&type=chunk) Adjusted EBITDA (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :---------------------- | :-------------------- | :-------------------- | :-------------------- | :------- | | Adjusted EBITDA | $76,811 | $80,931 | $(4,120) | (5.1)% | Adjusted EBITDA (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :---------------------- | :-------------------- | :-------------------- | :-------------------- | :------- | | Adjusted EBITDA | $141,777 | $155,067 | $(13,290) | (8.6)% | - **Adjusted EBITDA** decreased **5%** for Q2 2025 and **9%** for YTD 2025, primarily due to lower investment management fees and placement fees, and higher personnel expenses, partially offset by increased origination and property sales broker fees[194](index=194&type=chunk)[197](index=197&type=chunk) [Financial Condition](index=48&type=section&id=Financial%20Condition) Discusses the sources and uses of cash flows from operating, investing, and financing activities - **Cash flows from operating activities** are generated from loan sales, servicing fees, placement fees, net warehouse interest income (expense), property sales broker fees, investment management fees, research subscription fees, investment banking advisory fees, and other income, net of loan origination and operating costs[198](index=198&type=chunk) - **Cash flows from investing activities** include the funding and repayment of loans held for investment, contributions to and distributions from joint ventures, purchases of equity-method investments, cash paid for acquisitions, and the purchase of available-for-sale ("AFS") securities pledged to Fannie Mae[199](index=199&type=chunk) - **Cash flows from financing activities** involve using warehouse loan facilities and corporate cash to fund loan closings, funding large acquisitions, repurchasing shares, paying cash dividends, making long-term debt principal payments, and repaying short-term borrowings[200](index=200&type=chunk) - **Net cash used in operating activities** increased by **$320.1 million (160%)** for the six months ended June 30, 2025, primarily due to originations outpacing sales by **$567.6 million**[203](index=203&type=chunk)[205](index=205&type=chunk) - **Net cash used in investing activities** increased by **$32.3 million (109%)** due to increased cash paid for Agency loan repurchases and purchases of equity-method investments[203](index=203&type=chunk)[204](index=204&type=chunk)[206](index=206&type=chunk) - **Net cash provided by financing activities** increased by **$427.2 million (359%)** due to increased warehouse notes payable borrowings and issuance of Senior Notes, partially offset by repayments of notes payable and debt issuance costs[203](index=203&type=chunk)[207](index=207&type=chunk) [Segment Results](index=51&type=section&id=Segment%20Results) Provides a detailed breakdown of financial performance for each operating segment [Capital Markets](index=51&type=section&id=Capital%20Markets_Segment) Reviews the performance of the Capital Markets segment, including transaction volumes and revenue drivers Transaction Volume (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :-------------------- | :-------------------- | :-------------------- | :------- | | Total Debt Financing Volume | $11,490,425 | $6,702,743 | $4,787,682 | 71% | | Property Sales Volume | $2,313,585 | $1,530,783 | $782,802 | 51% | | **Total Transaction Volume** | **$13,804,010** | **$8,233,526** | **$5,570,484** | **68%** | Transaction Volume (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :-------------------- | :-------------------- | :-------------------- | :------- | | Total Debt Financing Volume | $16,511,567 | $11,914,251 | $4,597,316 | 39% | | Property Sales Volume | $4,152,875 | $2,697,934 | $1,454,941 | 54% | | **Total Transaction Volume** | **$20,664,442** | **$14,612,185** | **$6,052,257** | **41%** | - **Net income for CM** increased **200% to $33.1 million** for Q2 2025 and **718% to $35.5 million** for YTD 2025[210](index=210&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk) - **Origination fees** increased due to higher debt financing volume (especially Agency debt financing), despite declines in the origination fee rate due to a competitive environment and a large Fannie Mae portfolio with lower rates[218](index=218&type=chunk) - **MSR income** increased due to higher Agency debt financing volumes, partially offset by decreases in the weighted-average servicing fee (WASF) on Fannie Mae debt financing volume, also due to competition and large portfolios[219](index=219&type=chunk) - **Property sales broker fees** increased due to higher property sales volumes, partially offset by decreases in the broker fee rate due to competition[220](index=220&type=chunk) - **Personnel expenses** increased due to higher commission costs from increased origination and property sales broker fees, increased salaries/benefits (**5-7% headcount increase**), and severance expense[222](index=222&type=chunk)[223](index=223&type=chunk) [Servicing & Asset Management](index=57&type=section&id=Servicing%20%26%20Asset%20Management_Segment) Analyzes the Servicing & Asset Management segment's portfolio growth and revenue trends Managed Portfolio (June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :-------------------- | :-------------------- | :-------------------- | :------- | | Total Servicing Portfolio | $137,349,124 | $132,777,911 | $4,571,213 | 3% | | Assets Under Management | $18,623,451 | $17,566,666 | $1,056,785 | 6% | | **Total Managed Portfolio** | **$155,972,575** | **$150,344,577** | **$5,627,998** | **4%** | - **Net income for SAM** decreased **7% to $37.5 million** for Q2 2025 and **32% to $56.7 million** for YTD 2025[236](index=236&type=chunk)[238](index=238&type=chunk)[241](index=241&type=chunk) - **Servicing fees** increased due to growth in the **average servicing portfolio** (driven by Fannie Mae loans) and small increases in the **average servicing fee rate**[242](index=242&type=chunk) - **Investment management fees** declined primarily due to an **$8.5 million** (Q2) and **$11.9 million** (YTD) decrease from **LIHTC operations**, attributed to lower expected asset dispositions in 2025[243](index=243&type=chunk) - **Placement fees and other interest income** decreased due to lower **average placement fee rates** on escrow deposits, influenced by a lower **short-term interest rate environment**[244](index=244&type=chunk)[246](index=246&type=chunk) - **Other revenues** increased in Q2 2025 due to a **$4.2 million increase in syndication fees** (**45% increase in equity syndication volume**), partially offset by lower income from equity method investments[247](index=247&type=chunk) - **Personnel expenses** increased due to higher salaries, benefits, and bonus accruals, and a **7% increase in average segment headcount**[248](index=248&type=chunk)[249](index=249&type=chunk) [Corporate](index=63&type=section&id=Corporate_Segment) Examines the financial results of the Corporate segment, including revenues and expenses - **Net loss for Corporate** increased to **$(36.7) million** for Q2 2025 (from **$(28.8) million**) and to **$(55.5) million** for YTD 2025 (from **$(53.5) million**)[260](index=260&type=chunk)[262](index=262&type=chunk) - **Other revenues** increased in Q2 2025 due to **$1.1 million interest income on invested capital** and a **$1.5 million increase from the deferred compensation plan**[263](index=263&type=chunk) - **Personnel expenses** increased due to higher salaries and benefits (**7-8% headcount increase**) and deferred compensation plan expenses, partially offset by decreased subjective bonus accruals[264](index=264&type=chunk)[265](index=265&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details exposure to market risks, including interest rate and MSR fair value sensitivities, and their potential financial impact [Interest Rate Risk](index=69&type=section&id=Interest%20Rate%20Risk) Quantifies the potential impact of interest rate changes on various revenue and expense items - The Company is not exposed to unhedged interest rate risk for loans held for sale to Fannie Mae, Freddie Mac, and HUD, as sale/placement is negotiated prior to closing and coupon rates are set concurrently[306](index=306&type=chunk) Impact of 100 bps EFFR Change on Annual Placement Fee Revenue (in thousands) | Scenario | June 30, 2025 | June 30, 2024 | | :-------------------------- | :-------------- | :-------------- | | 100 bps increase in EFFR | $26,725 | $26,619 | | 100 bps decrease in EFFR | $(26,725) | $(26,619) | Impact of 100 bps SOFR Change on Annual Net Warehouse Interest Income (in thousands) | Scenario | June 30, 2025 | June 30, 2024 | | :-------------------------- | :-------------- | :-------------- | | 100 bps increase in SOFR | $(11,791) | $(8,077) | | 100 bps decrease in SOFR | $11,791 | $8,077 | Impact of 100 bps SOFR Change on Annual Income from Operations (in thousands) | Scenario | June 30, 2025 | June 30, 2024 | | :-------------------------- | :-------------- | :-------------- | | 100 bps increase in SOFR | $(8,489) | $(7,825) | | 100 bps decrease in SOFR | $8,489 | $7,825 | [Market Value Risk](index=70&type=section&id=Market%20Value%20Risk) Discusses the sensitivity of Mortgage Servicing Rights fair value to changes in market assumptions - The fair value of **Mortgage Servicing Rights (MSRs)** is subject to market-value risk. A **100-basis point increase/decrease** in the weighted average discount rate would decrease/increase MSR fair value by approximately **$40.3 million** as of June 30, 2025[311](index=311&type=chunk) - A **50-basis point increase/decrease** in placement fee rates would increase/decrease MSR fair value by approximately **$49.1 million** as of June 30, 2025[311](index=311&type=chunk) - **90% of loans** for which the Company earns servicing fees are protected from prepayment risk through provisions like prepayment premiums, loan defeasance, or yield maintenance fees[311](index=311&type=chunk) [Item 4. Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - **Disclosure controls and procedures** were evaluated and deemed effective as of June 30, 2025[312](index=312&type=chunk)[313](index=313&type=chunk) - **No material changes in internal control over financial reporting** occurred during the quarter ended June 30, 2025[314](index=314&type=chunk) [PART II OTHER INFORMATION](index=64&type=section&id=PART%20II%20OTHER%20INFORMATION) Presents other non-financial information and disclosures required for the reporting period [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with no material adverse effects expected on its financial condition - The Company is party to various claims and litigation in the ordinary course of business, none of which are considered material[316](index=316&type=chunk) - Management believes any liability from pending lawsuits would not materially adversely affect business, results of operations, liquidity, or financial condition[316](index=316&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors from the 2024 Form 10-K - **No material changes to the risk factors** disclosed in the 2024 Form 10-K[317](index=317&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details share repurchases for tax obligations and the status of the $75.0 million stock repurchase program - The Company repurchased **8,632 shares of common stock** at an **average price of $73.94 per share** during Q2 2025 to satisfy grantee tax withholding obligations[318](index=318&type=chunk)[320](index=320&type=chunk) - A **$75.0 million stock repurchase program** was approved in February 2025, but no shares were repurchased under this program during the six months ended June 30, 2025, leaving **$75.0 million of authorized capacity remaining**[319](index=319&type=chunk)[281](index=281&type=chunk) [Item 3. Defaults Upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms no defaults occurred upon senior securities during the reported period - **No defaults upon senior securities**[321](index=321&type=chunk) [Item 4. Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This disclosure item is not applicable to the company's operations - Not applicable[322](index=322&type=chunk) [Item 5. Other Information](index=71&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 or non-Rule 10b5-1 trading agreements were adopted or terminated by directors or officers - **No Rule 10b5-1 or non-Rule 10b5-1 trading agreements** were adopted or terminated by directors or officers during Q2 2025[323](index=323&type=chunk) [Item 6. Exhibits](index=72&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including agreements, corporate documents, and certifications - **Exhibits include** Contribution Agreements, Purchase Agreements, Articles of Amendment, Bylaws, Registration Rights Agreements, Voting Agreements, Indenture, Warehousing Credit and Security Agreement Amendment, and Certifications (302 and 906)[325](index=325&type=chunk) [Signatures](index=73&type=section&id=Signatures) The report is officially signed by the Chairman and CEO, and the Executive Vice President and CFO - **Report signed by** William M. Walker (Chairman and CEO) and Gregory A. Florkowski (EVP and CFO) on August 7, 2025[330](index=330&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Walker & Dunlop achieved significant Q2 2025 growth in transaction volume, revenues, and net income, though adjusted EBITDA and core EPS declined due to non-cash MSR income, with year-to-date trends showing similar patterns [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Q2 2025 saw significant growth in transaction volume, revenues, and GAAP net income, driven by a commercial real estate market rebound, despite declines in adjusted EBITDA and adjusted core EPS due to non-cash MSR income Q2 2025 Key Financial Metrics | Metric | Q2 2025 | vs. Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Transaction Volume | $14.0 billion | $8.5 billion | +65% | | Total Revenues | $319.2 million | $270.7 million | +18% | | Net Income | $34.0 million | $22.7 million | +50% | | Diluted EPS | $0.99 | $0.67 | +48% | | Adjusted EBITDA | $76.8 million | $80.9 million | -5% | | Adjusted Core EPS | $1.15 | $1.23 | -7% | - The increase in net income and diluted EPS was largely driven by a non-cash increase in the fair value of expected net cash flows from servicing (MSR income), which is excluded from adjusted EBITDA and adjusted core EPS[1](index=1&type=chunk) - CEO Willy Walker noted the company is gaining market share and broadening its capabilities into hospitality, data centers, and Europe, capitalizing on the start of a new commercial real estate investment cycle[2](index=2&type=chunk) - The Board of Directors declared a dividend of **$0.67 per share** for the third quarter of 2025[1](index=1&type=chunk) [Year-to-Date 2025 Highlights](index=1&type=section&id=Year-to-Date%202025%20Highlights) Year-to-date 2025 results show a 41% increase in transaction volume and 12% revenue growth, with modest gains in net income and diluted EPS, but significant declines in adjusted EBITDA and adjusted core EPS YTD 2025 Key Financial Metrics | Metric | YTD 2025 | vs. YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Transaction Volume | $21.0 billion | $14.8 billion | +41% | | Total Revenues | $556.6 million | $498.7 million | +12% | | Net Income | $36.7 million | $34.5 million | +6% | | Diluted EPS | $1.07 | $1.02 | +5% | | Adjusted EBITDA | $141.8 million | $155.1 million | -9% | | Adjusted Core EPS | $2.00 | $2.39 | -16% | [Consolidated Second Quarter 2025 Operating Results](index=2&type=section&id=Consolidated%20Second%20Quarter%202025%20Operating%20Results) Q2 2025 consolidated results show a 65% surge in transaction volume, boosting revenues and GAAP net income, with the servicing portfolio growing to **$137.3 billion**, though credit metrics indicate increased defaulted loans [Transaction Volumes](index=2&type=section&id=Transaction%20Volumes) Q2 2025 total transaction volume surged **65% to $14.0 billion**, driven by a **68% increase** in debt financing, including a **106% rise** in Fannie Mae volume and a **51% increase** in property sales Q2 2025 Transaction Volumes (in thousands) | Category | Q2 2025 | Q2 2024 | % Variance | | :--- | :--- | :--- | :--- | | Fannie Mae | $3,114,308 | $1,510,804 | 106% | | Freddie Mac | $1,752,597 | $1,153,190 | 52% | | Brokered | $6,335,071 | $3,852,851 | 64% | | **Total Debt Financing Volume** | **$11,638,225** | **$6,917,718** | **68%** | | Property Sales Volume | $2,313,585 | $1,530,783 | 51% | | **Total Transaction Volume** | **$13,951,810** | **$8,448,501** | **65%** | - GSE (Fannie Mae and Freddie Mac) debt financing volume collectively increased by **83% year-over-year**, driving market share gains to **11.4% year-to-date**, up from 10.3% in 2024[7](index=7&type=chunk) - A large **$941 million** Fannie Mae loan portfolio refinancing contributed to the volume growth but generated lower margins, which are expected to continue into the second half of 2025[7](index=7&type=chunk) [Managed Portfolio](index=3&type=section&id=Managed%20Portfolio) The total managed portfolio grew **4% to $156.0 billion** as of June 30, 2025, with the servicing portfolio reaching **$137.3 billion** and assets under management increasing **6% to $18.6 billion** Managed Portfolio as of June 30, 2025 (in thousands) | Category | Q2 2025 | Q2 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total Servicing Portfolio | $137,349,124 | $132,777,911 | 3% | | Assets under management | $18,623,451 | $17,566,666 | 6% | | **Total Managed Portfolio** | **$155,972,575** | **$150,344,577** | **4%** | - The company added **$4.6 billion** of net loans to its servicing portfolio over the past 12 months, led by Fannie Mae loans[12](index=12&type=chunk) - Over the next two years, **$10.9 billion** of Agency loans (**9% of the portfolio**) are scheduled to mature, presenting a significant refinancing opportunity[12](index=12&type=chunk) [Key Performance & Credit Metrics](index=3&type=section&id=Key%20Performance%20%26%20Credit%20Metrics) Q2 2025 performance showed **50% net income growth** and an expanded operating margin, but adjusted EBITDA declined **5%**, while the at-risk servicing portfolio grew to **$65.4 billion** and defaulted loans increased **123% to $108.5 million** Q2 2025 Key Performance Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Walker & Dunlop net income | $34.0M | $22.7M | | Adjusted EBITDA | $76.8M | $80.9M | | Diluted EPS | $0.99 | $0.67 | | Operating margin | 15% | 10% | | Return on equity | 8% | 5% | Q2 2025 Key Credit Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | At-risk servicing portfolio | $65.4B | $60.1B | | Defaulted loans | $108.5M | $48.6M | | Defaulted loans as % of at-risk portfolio | 0.17% | 0.08% | - As of June 30, 2025, there were eight at-risk loans in default with an aggregate unpaid principal balance of **$108.5 million**, compared to five loans totaling **$48.6 million** a year prior[18](index=18&type=chunk) - A provision for credit losses of **$1.8 million** was recorded in Q2 2025, mainly related to an updated reserve for a previously defaulted loan and portfolio growth[18](index=18&type=chunk) [Second Quarter 2025 Financial Results by Segment](index=5&type=section&id=Second%20Quarter%202025%20Financial%20Results%20by%20Segment) Q2 2025 saw the Capital Markets segment drive growth with **46% revenue increase** and **211% operating income surge**, while Servicing & Asset Management revenues declined **5%**, and the Corporate segment's net loss widened **28%** [Capital Markets](index=5&type=section&id=Capital%20Markets) The Capital Markets segment achieved strong Q2 2025 performance, with total revenues increasing **46% to $172.8 million** and operating income more than tripling to **$45.4 million**, driven by higher origination fees and MSR income Capital Markets Financial Results (in thousands) | Metric | Q2 2025 | Q2 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total revenues | $172,791 | $118,170 | 46% | | Income from operations | $45,427 | $14,611 | 211% | | Walker & Dunlop net income | $33,142 | $11,039 | 200% | | Adjusted EBITDA | $1,323 | $(8,532) | -116% | - The increase in origination fees was driven by higher overall debt financing volume, particularly the **81% increase** in Agency volume, though the origination fee rate declined from **0.95% to 0.82%** due to competitive pressures and a large, lower-margin transaction[23](index=23&type=chunk) - Personnel expense rose **26%** due to higher variable compensation from increased transaction volume, a **5% increase** in headcount, and severance costs[23](index=23&type=chunk) [Servicing & Asset Management](index=7&type=section&id=Servicing%20%26%20Asset%20Management) Servicing & Asset Management revenues decreased **5% to $140.7 million** in Q2 2025, as a **4% rise** in servicing fees was offset by significant drops in investment management and placement fees, leading to a **21% decline** in operating income to **$43.0 million** Servicing & Asset Management Financial Results (in thousands) | Metric | Q2 2025 | Q2 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total revenues | $140,735 | $148,232 | -5% | | Income from operations | $42,966 | $54,372 | -21% | | Walker & Dunlop net income | $37,541 | $40,432 | -7% | | Adjusted EBITDA | $111,931 | $124,502 | -10% | - Investment management fees decreased due to a reduced accrual from LIHTC funds, reflecting fewer expected asset dispositions and challenging market dynamics[26](index=26&type=chunk) - Placement fees and other interest income declined due to a lower average placement fee rate driven by lower short-term interest rates[26](index=26&type=chunk) [Corporate](index=8&type=section&id=Corporate) The Corporate segment's net loss widened **28% to $36.7 million** in Q2 2025, with total expenses increasing **6% to $47.7 million**, primarily due to an **11% rise** in personnel costs from increased headcount Corporate Financial Results (in thousands) | Metric | Q2 2025 | Q2 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total revenues | $5,714 | $4,274 | 34% | | Income (loss) from operations | $(42,019) | $(40,786) | 3% | | Walker & Dunlop net income (loss) | $(36,731) | $(28,808) | 28% | | Adjusted EBITDA | $(36,443) | $(35,039) | 4% | - The increase in personnel costs was driven by higher salaries and benefits from an **8% increase** in average segment headcount and an increase in expense from the deferred compensation plan[28](index=28&type=chunk) [Year-to-Date 2025 Operating Results](index=9&type=section&id=Year-to-Date%202025%20Operating%20Results) Year-to-date 2025 consolidated results show **41% transaction volume growth** and **12% revenue increase**, leading to **6% net income growth**, but adjusted EBITDA and core EPS declined due to lower-margin fees and higher personnel expenses, with mixed segment performance [YTD Consolidated Performance](index=9&type=section&id=YTD%20Consolidated%20Performance) Year-to-date consolidated performance shows total transaction volume up **41% to $21.0 billion** and revenues up **12% to $556.6 million**, with net income growing **6% to $36.7 million**, despite declines in adjusted EBITDA and core EPS due to fee pressures and higher personnel costs YTD 2025 Consolidated Results (in thousands, except per share) | Metric | YTD Q2 2025 | YTD Q2 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total transaction volume | $20,987,742 | $14,842,960 | 41% | | Total revenues | $556,607 | $498,735 | 12% | | Walker & Dunlop net income | $36,706 | $34,529 | 6% | | Adjusted EBITDA | $141,777 | $155,067 | -9% | | Diluted EPS | $1.07 | $1.02 | 5% | | Adjusted core EPS | $2.00 | $2.39 | -16% | - The increase in transaction volume was driven by a **61% increase** in Agency debt financing, a **24% increase** in brokered debt financing, and a **54% increase** in property sales volume[33](index=33&type=chunk) [YTD Financial Results by Segment](index=10&type=section&id=YTD%20Financial%20Results%20by%20Segment) Year-to-date segment results were mixed, with Capital Markets revenues growing **38%** and achieving a **$50.0 million** profit, while Servicing & Asset Management revenues declined **6%**, and the Corporate segment's operating loss increased **8% to $78.1 million** [Capital Markets](index=10&type=section&id=YTD%20Capital%20Markets) Year-to-date, Capital Markets revenues grew **38% to $275.4 million**, leading to a substantial improvement in operating income to **$50.0 million** and a **718% surge** in net income to **$35.5 million** YTD Capital Markets Financial Results (in thousands) | Metric | YTD Q2 2025 | YTD Q2 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total revenues | $275,361 | $200,067 | 38% | | Income from operations | $49,968 | $6,281 | 696% | | Walker & Dunlop net income | $35,502 | $4,339 | 718% | - Origination fees increased **29%** due to a **39% rise** in debt financing volume, though the origination fee rate tightened from **0.90% to 0.84%** due to competition and transaction mix[38](index=38&type=chunk) [Servicing & Asset Management](index=11&type=section&id=YTD%20Servicing%20%26%20Asset%20Management) Year-to-date, Servicing & Asset Management revenues declined **6% to $272.6 million**, as growth in servicing fees was offset by significant drops in investment management and placement fees, resulting in a **26% fall** in operating income to **$79.7 million** YTD Servicing & Asset Management Financial Results (in thousands) | Metric | YTD Q2 2025 | YTD Q2 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total revenues | $272,638 | $289,467 | -6% | | Income from operations | $79,714 | $107,643 | -26% | | Walker & Dunlop net income | $56,667 | $83,715 | -32% | - The decrease in investment management fees was primarily due to fewer expected asset dispositions in the LIHTC funds, while lower placement fees resulted from lower short-term interest rates[41](index=41&type=chunk) [Corporate](index=12&type=section&id=YTD%20Corporate) Year-to-date, the Corporate segment's net loss widened **4% to $55.5 million**, with total expenses increasing **7% to $86.7 million**, primarily due to a **10% rise** in personnel costs from increased headcount YTD Corporate Financial Results (in thousands) | Metric | YTD Q2 2025 | YTD Q2 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total expenses | $86,672 | $81,249 | 7% | | Income (loss) from operations | $(78,064) | $(72,048) | 8% | | Walker & Dunlop net income (loss) | $(55,463) | $(53,525) | 4% | - The increase in personnel expense was primarily due to higher salaries and benefits associated with a **7% increase** in average segment headcount[43](index=43&type=chunk) [Capital Sources and Uses](index=13&type=section&id=Capital%20Sources%20and%20Uses) The company declared a **$0.67 per share** Q3 2025 dividend and maintains an active **$75.0 million** share repurchase program, though no shares have been repurchased as of June 30, 2025 [Dividends and Share Repurchases](index=13&type=section&id=Dividends%20and%20Share%20Repurchases) The Board declared a **$0.67 per share** dividend for Q3 2025, and a **$75.0 million** share repurchase program remains authorized, with no repurchases made as of June 30, 2025 - A dividend of **$0.67 per share** for Q3 2025 was declared, payable on September 5, 2025, to shareholders of record as of August 21, 2025[45](index=45&type=chunk) - A **$75.0 million** share repurchase program is authorized through February 2026, with no shares repurchased under this program as of June 30, 2025[46](index=46&type=chunk) [Additional Information and Financial Statements](index=13&type=section&id=Additional%20Information%20and%20Financial%20Statements) This section covers corporate disclosures, definitions of non-GAAP financial measures, forward-looking statement disclaimers, and includes unaudited condensed consolidated financial statements with supplemental operating and credit data, along with GAAP to non-GAAP reconciliations [Non-GAAP Financial Measures and Forward-Looking Statements](index=13&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Forward-Looking%20Statements) This section details the company's use of non-GAAP financial measures like adjusted EBITDA and adjusted core EPS to supplement GAAP figures, alongside a standard safe harbor statement for forward-looking statements [Financial Statements and Supplemental Data](index=15&type=section&id=Financial%20Statements%20and%20Supplemental%20Data) This appendix contains unaudited condensed consolidated financial statements, including balance sheets and income statements, supplemental tables for operating and credit data, and detailed reconciliations of GAAP to non-GAAP financial measures

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the first quarter of 2025 [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Walker & Dunlop's unaudited condensed consolidated financial statements for Q1 2025, highlighting a significant net income decrease to **$2.8 million** [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to **$4.51 billion**, liabilities rose to **$2.77 billion**, and equity slightly decreased to **$1.74 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $180,971 | $279,270 | | Loans held for sale, at fair value | $946,372 | $780,749 | | Mortgage servicing rights | $825,761 | $852,399 | | Total assets | $4,511,878 | $4,381,993 | | Warehouse notes payable | $931,002 | $781,706 | | Notes payable | $825,556 | $768,044 | | Total liabilities | $2,767,789 | $2,622,130 | | Total equity | $1,744,089 | $1,759,863 | [Condensed Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For Q1 2025, total revenues increased 4% to **$237.4 million**, but expenses rose 8% to **$232.1 million**, leading to a 77% drop in net income to **$2.8 million** Q1 2025 vs Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $237,367 | $228,059 | | Total expenses | $232,123 | $214,380 | | Income from operations | $5,244 | $13,679 | | Walker & Dunlop net income | $2,754 | $11,866 | | Diluted earnings per share | $0.08 | $0.35 | - Key revenue drivers for the quarter included a 6% increase in Loan origination fees to **$46.4 million**, a 33% increase in Fair value of expected net cash flows from servicing to **$27.8 million**, and a 53% increase in Property sales broker fees to **$13.5 million**[13](index=13&type=chunk) - Personnel expense, the largest cost component, increased by 9% to **$121.4 million** The provision for credit losses saw a substantial increase to **$3.7 million** from **$0.5 million** in the prior year[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash used in operating activities was **$281.1 million**, a significant reversal, while financing activities provided **$222.0 million** from new debt issuance Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(281,108) | $38,397 | | Net cash provided by (used in) investing activities | $(39,382) | $(25,050) | | Net cash provided by (used in) financing activities | $222,026 | $(124,153) | | Net decrease in cash | $(98,464) | $(110,806) | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, MSRs, debt structure, and fair value measurements, highlighting **$400 million** Senior Notes issuance and a new stock repurchase program - The company is a leading commercial real estate services and finance company, originating, selling, and servicing debt and equity financing products, with a focus on Agency lending (Fannie Mae, Freddie Mac, HUD)[21](index=21&type=chunk)[22](index=22&type=chunk) - The provision for credit losses for Q1 2025 was **$3.7 million**, primarily driven by the provision for risk-sharing obligations, compared to a total provision of **$0.5 million** in Q1 2024[26](index=26&type=chunk) - The fair value of Mortgage Servicing Rights (MSRs) was **$1.4 billion** as of March 31, 2025 A 100 basis point increase in the discount rate would decrease the fair value by **$42.1 million**[38](index=38&type=chunk) - In March 2025, the company issued **$400.0 million** of 6.625% senior unsecured notes due 2033 and used **$328.5 million** of the proceeds to pay down its existing Term Loan The company also entered into an interest rate swap to convert the new notes' fixed rate to a floating SOFR-based rate[55](index=55&type=chunk) - In February 2025, the Board approved a new stock repurchase program for up to **$75.0 million** No shares were repurchased under this program in Q1 2025 A quarterly dividend of **$0.67 per share** was paid[105](index=105&type=chunk)[106](index=106&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, noting a 10% increase in transaction volume to **$7.0 billion**, but a 77% net income decline due to higher expenses Q1 2025 Key Performance Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Transaction Volume | $7,035,932 thousand | $6,394,459 thousand | | Walker & Dunlop net income | $2,754 thousand | $11,866 thousand | | Adjusted EBITDA | $64,966 thousand | $74,136 thousand | | Diluted EPS | $0.08 | $0.35 | - The business environment in Q1 2025 was shaped by volatile interest rates and new administration tariff policies, which created market turmoil However, the GSEs increased their lending caps for 2025, providing more capacity for the multifamily market[166](index=166&type=chunk)[170](index=170&type=chunk) - The increase in total revenues was driven by higher loan origination fees, MSR income, and property sales fees, but was offset by declines in investment management and placement fees[182](index=182&type=chunk) - The increase in total expenses was primarily due to higher personnel expense (from commissions and severance), a larger provision for credit losses, and a **$4.2 million** write-off of debt issuance costs from the Term Loan paydown[183](index=183&type=chunk)[188](index=188&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risk from interest rate changes impacting revenue, expenses, and MSR fair value, with 90% of the servicing portfolio having prepayment protections Annualized Interest Rate Sensitivity Analysis (as of March 31, 2025, in millions) | Sensitivity Scenario | Impact on Placement Fee Revenue | Impact on Net Warehouse Interest Income | Impact on Income from Operations (Corporate Debt) | | :--- | :--- | :--- | :--- | | 100 bps Rate Increase | +$24.3 | -$8.2 | -$8.5 | | 100 bps Rate Decrease | -$24.3 | +$8.2 | +$8.5 | - The fair value of MSRs is subject to market value risk As of March 31, 2025, a 100 basis point increase in the discount rate would decrease MSR fair value by approximately **$42.1 million**[283](index=283&type=chunk) - As of March 31, 2025, 90% of the loans in the servicing portfolio have prepayment protections, mitigating prepayment risk Consequently, the company does not hedge this risk[284](index=284&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[286](index=286&type=chunk) - No material changes were made to the internal control over financial reporting during the quarter ended March 31, 2025[287](index=287&type=chunk) [PART II OTHER INFORMATION](index=59&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, equity sales, and other disclosures [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, none expected to materially affect its financial condition or operations - The company states that it is not party to any material litigation and does not expect pending legal matters to have a material adverse effect on its financial condition[289](index=289&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes have occurred from the risk factors disclosed in the 2024 Form 10-K[290](index=290&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company purchased 97,069 shares at **$88.51** for employee tax withholding, separate from its **$75.0 million** stock repurchase program Issuer Purchases of Equity Securities for Q1 2025 (in dollars) | Period | Total Shares Purchased | Average Price Paid per Share | Remaining Repurchase Capacity | | :--- | :--- | :--- | :--- | | Jan 1-31, 2025 | 20,132 | $95.83 | $75,000,000 | | Feb 1-29, 2025 | 58,024 | $86.41 | $75,000,000 | | Mar 1-31, 2025 | 18,913 | $87.17 | $75,000,000 | | **Q1 Total** | **97,069** | **$88.51** | **$75,000,000** | - The company had **$75.0 million** of authorized share repurchase capacity remaining under its 2025 Stock Repurchase Program as of March 31, 2025[291](index=291&type=chunk) [Other Information](index=60&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading agreement during the first quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the first quarter of 2025[295](index=295&type=chunk) [Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications, various agreements, and XBRL data files

Financial Data and Key Metrics Changes - Walker & Dunlop reported a total transaction volume of $7 billion in Q1 2025, up 10% from the previous year, driving total revenue growth of 4% [6][7] - GAAP EPS for the quarter was $0.08, significantly down due to increased personnel costs and fees associated with a debt offering [7][17] - Adjusted EBITDA declined to $65 million, and adjusted core EPS fell to $0.85 [17][18] Business Line Data and Key Metrics Changes - The Capital Markets segment saw total revenues grow 25% to $103 million, driven by stronger revenues across nearly every area [19] - Fannie Mae lending volume increased by 67%, and total agency volumes were up 30% year over year [20] - The Servicing and Asset Management segment experienced a 3% year-over-year increase in servicing fees, but total segment revenues declined 7% due to lower investment management fees and placement fees [21][22] Market Data and Key Metrics Changes - 88% of Q1 transaction volume was in multifamily assets, indicating strong demand in this sector [8] - There is nearly $200 billion of equity looking to invest in North American commercial real estate, with expectations for increased transaction volumes in 2025 [8][9] - The multifamily investment sales volume has been in line with or above pre-pandemic levels from 2015 to 2020 [9] Company Strategy and Development Direction - The company is focused on expanding its capabilities and market share, particularly in the multifamily sector and through strategic hires and new office openings [15][16] - Walker & Dunlop aims to grow market share with major lending partners like Fannie Mae, Freddie Mac, and HUD, and is positioned to benefit from potential changes in HUD policies [31][32] - The company is launching WD Suite, a web-based software aimed at engaging private clients and enhancing transaction flow [29][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving annual guidance despite Q1 earnings being lower than expected, citing strong pipelines and market conditions [27][37] - The company noted that commercial real estate owners are under pressure to refinance and deploy capital, which is expected to drive transaction volumes [56] - Management highlighted the importance of the ten-year treasury rates in determining market activity, indicating a positive outlook for the commercial real estate sector [44] Other Important Information - The company incurred $10 million in expenses related to debt refinancing, loan loss provisions, and personnel separations during the quarter [18] - A quarterly dividend of $0.67 per share was approved, consistent with the previous quarter [26] Q&A Session Summary Question: Insights on investor behavior in the current market - Management noted that there has been no significant deal flow fallout due to market volatility, and investors are eager to enter the market despite uncertainties [42][43] Question: Expectations for GSEs hitting their caps - Management observed that Fannie and Freddie are actively competing in the market, indicating a positive outlook for them to meet their caps [45][46] Question: Discussion on operating expenses and business lines - Management confirmed that no business lines were exited and emphasized the focus on improving production metrics to reduce operating expenses as a percentage of revenues [52][54]

Financial Data and Key Metrics Changes - The total transaction volume for Q1 2025 was $7 billion, up 10% from the previous year, driving total revenue growth of 4% [6][7] - GAAP EPS for the quarter was $0.08, significantly down due to increased personnel costs, debt offering fees, and additions to the loan loss reserve [7][16] - Adjusted EBITDA declined to $65 million, and adjusted core EPS decreased to $0.85 [16][18] Business Line Data and Key Metrics Changes - Capital Markets segment revenues grew 25% to $103 million, with Fannie Mae lending volume up 67% and total agency volumes up 30% year over year [18][19] - The Servicing and Asset Management segment saw a 3% increase in servicing fees but total segment revenues declined 7% due to lower investment management fees and placement fees [20][21] - The research and investment banking business, Zelman, experienced a revenue increase of 129% to $11 million, driven by several investment banking transactions [19][33] Market Data and Key Metrics Changes - 88% of Q1 volume was in multifamily assets, indicating strong demand in that sector [8] - There is nearly $200 billion of equity looking to invest in North American commercial real estate, particularly in the multifamily sector [8][12] - The median priced home in America increased from $285,000 in February 2020 to $385,000 in February 2025, impacting the affordability of single-family housing [11][12] Company Strategy and Development Direction - The company is focused on expanding its market share with major lending partners like Fannie Mae, Freddie Mac, and HUD, aiming for an average production of $200 million per banker broker in 2025 [30][32] - Recent strategic moves include entering the hospitality investment sales space and opening a new office in London to tap into European and Middle Eastern markets [14][15] - The company plans to launch WD Suite, a web-based software aimed at engaging private clients and enhancing deal flow [27][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving annual guidance despite Q1 earnings being lower than expected, citing strong pipelines and market conditions [25][37] - The company noted that commercial real estate owners are under pressure to refinance and deploy capital, which is expected to drive transaction volumes [56] - Management highlighted the positive changes at HUD and the engagement of Fannie and Freddie in the market as favorable indicators for future growth [31][37] Other Important Information - The company incurred $10 million in expenses related to debt refinancing, loan loss provisions, and personnel separations during the quarter [17][18] - A quarterly dividend of $0.67 per share was approved, consistent with the previous quarter [24] Q&A Session Summary Question: Insights on investor behavior and underwriting assumptions - Management noted that there has been no significant fallout in deal flow despite market volatility, with investors eager to enter the market [42] Question: Expectations for GSEs hitting their caps - Management indicated that both Fannie and Freddie are actively competing in the market, which is a positive sign for achieving their caps [45][46] Question: Discussion on operating expenses and future cost ratios - Management confirmed that operating expenses are currently high due to volume fluctuations but expect to reduce the ratio as transaction volumes increase [53][55]

Market Trends & Investor Sentiment - There's significant demand for commercial real estate (CRE) investment opportunities in North America[10] - Multifamily sales volume has rebounded to pre-pandemic levels[13] - Investor buying sentiment reflects a desire to transact in the multifamily environment[16] - The 2024 multifamily absorption rate was 2.2 times above the pre-COVID average[20] - The delta between the cost of homeownership and renting remains wide[24] Financial Performance (Q1 2025 vs Q1 2024) - Consolidated total transaction volume increased by 10%, from $6394459 thousand to $7035932 thousand[31] - Total revenues increased by 25%, from $81897 thousand to $102570 thousand[31] - Net income increased by 135%, from -$6700 thousand to $2360 thousand[31] - Adjusted EBITDA increased by 31%, from -$19297 thousand to -$13327 thousand[31] - Total revenues for Servicing & Asset Management ("SAM") decreased by 7%, from $141235 thousand to $131903 thousand[35] - Net income for SAM decreased by 56%, from $43283 thousand to $19126 thousand[35] - Adjusted EBITDA for SAM decreased by 10%, from $119658 thousand to $107902 thousand[35] Future Outlook & Goals - The company anticipates high single-digits to double-digits growth in adjusted core earnings per share for 2025[38] - The company anticipates flat to high single-digits growth in adjusted EBITDA for 2025[38] - The company aims to increase average transaction volume per banker/broker to $200 million, a 16% increase[41]

[First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) [Q1 2025 Performance Overview](index=1&type=section&id=First%20Quarter%202025%20Highlights) In the first quarter of 2025, Walker & Dunlop saw a 10% year-over-year increase in total transaction volume to $7.0 billion and a 4% rise in total revenues to $237.4 million, though a significant 77% decline in net income to $2.8 million and diluted EPS to $0.08 was driven by an 8% increase in total expenses, primarily due to higher personnel costs, a corporate debt write-off, and increased credit loss provisions, yet the company maintains its 2025 outlook citing improving transaction volumes and durable profit streams reflected in less severe declines in adjusted core net income and adjusted EBITDA Q1 2025 Key Financial Metrics (YoY) | Metric | Q1 2025 | % Change YoY | | :--- | :--- | :--- | | Total Transaction Volume | $7.0 billion | 10% ▲ | | Total Revenues | $237.4 million | 4% ▲ | | Net Income | $2.8 million | 77% ▼ | | Diluted EPS | $0.08 | 77% ▼ | | Adjusted EBITDA | $65.0 million | 12% ▼ | | Adjusted core EPS | $0.85 | 29% ▼ | | Servicing Portfolio | $135.6 billion | 3% ▲ | - The Board of Directors declared a quarterly dividend of **$0.67 per share** for the second quarter of 2025[1](index=1&type=chunk)[3](index=3&type=chunk) - Management attributes the significant drop in GAAP net income to increased severance expense, fees from a corporate debt issuance, and credit losses, while noting that adjusted figures were down materially less[2](index=2&type=chunk) - The company expressed optimism for the remainder of 2025, anticipating that pent-up demand will drive higher transaction volumes, supported by initial deregulatory changes at HUD and the GSEs[2](index=2&type=chunk) [Consolidated Operating and Financial Results](index=2&type=section&id=Consolidated%20Operating%20and%20Financial%20Results) [Consolidated First Quarter 2025 Operating Results](index=2&type=section&id=Consolidated%20First%20Quarter%202025%20Operating%20Results) The company's consolidated operating results for Q1 2025 show a 10% increase in total transaction volume, driven by strong growth in Fannie Mae, HUD, and property sales volumes, which offset a decline in brokered debt financing, while the managed portfolio grew by 3% to $154.2 billion, key profitability metrics declined with net income falling 77% due to rising expenses, and credit metrics showed an increase in the at-risk portfolio and defaulted loans, leading to a $3.7 million provision for credit losses [Transaction Volumes](index=2&type=section&id=Transaction%20Volumes) Total transaction volume for Q1 2025 increased by 10% year-over-year to $7.0 billion, primarily fueled by a 67% surge in Fannie Mae volumes, a 948% increase in Ginnie Mae-HUD volumes, and a 58% rise in property sales volume, partially offset by a 23% decrease in brokered debt financing and a 17% drop in Freddie Mac volumes Q1 2025 Transaction Volumes (in thousands) | Category | Q1 2025 | Q1 2024 | % Variance | | :--- | :--- | :--- | :--- | | Fannie Mae | $1,511,794 | $903,368 | 67% | | Freddie Mac | $808,247 | $974,926 | (17)% | | Ginnie Mae - HUD | $148,158 | $14,140 | 948% | | Brokered | $2,552,943 | $3,319,074 | (23)% | | Property sales volume | $1,839,290 | $1,167,151 | 58% | | **Total transaction volume** | **$7,035,932** | **$6,394,459** | **10%** | - The **58% increase in property sales volume** outperformed the broader market's **36% increase**, indicating strengthening investment conviction in the multifamily sector[7](index=7&type=chunk) - The decline in brokered debt financing was attributed to market volatility causing investors to be selective on transaction timing, though the supply of capital from various providers remains strong[7](index=7&type=chunk) [Managed Portfolio & Key Performance Metrics](index=3&type=section&id=Managed%20Portfolio%20%26%20Key%20Performance%20Metrics) As of March 31, 2025, the total managed portfolio grew 3% year-over-year to $154.2 billion, with the servicing portfolio increasing by 3% to $135.6 billion and assets under management (AUM) rising 6% to $18.5 billion, despite this growth, key performance metrics deteriorated significantly as net income and diluted EPS both fell 77%, and the operating margin compressed from 6% to 2%, primarily due to personnel expenses rising to 51% of total revenues from 49% a year ago Managed Portfolio as of March 31, 2025 (in thousands) | Category | Q1 2025 | Q1 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total Servicing Portfolio | $135,648,716 | $131,963,765 | 3% | | Assets under management | $18,518,413 | $17,465,398 | 6% | | **Total Managed Portfolio** | **$154,167,129** | **$149,429,163** | **3%** | Q1 2025 Key Performance Metrics (YoY) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Walker & Dunlop net income | $2,754 thousand | $11,866 thousand | | Diluted EPS | $0.08 | $0.35 | | Operating margin | 2% | 6% | | Return on equity | 1% | 3% | | Personnel expenses (% of revenue) | 51% | 49% | - The fair value of mortgage servicing rights (MSRs) remained stable at **$1.4 billion** as of March 31, 2025, the same as the prior year[12](index=12&type=chunk) [Key Credit Metrics](index=4&type=section&id=Key%20Credit%20Metrics) The at-risk servicing portfolio grew 8% year-over-year to $64.5 billion, primarily due to new Fannie Mae loans, while defaulted loans increased 72% to $108.5 million (0.17% of the at-risk portfolio) from $63.3 million (0.11%) a year ago, leading the company to record a $3.7 million provision for credit losses in Q1 2025 mainly related to newly defaulted loans and the growth of the at-risk portfolio, and during 2024, the company received repurchase requests for five GSE loans, with two still outstanding with an aggregate balance of $46.1 million as of March 31, 2025 Key Credit Metrics as of March 31 (in thousands) | Metric | 2025 | 2024 | % Variance | | :--- | :--- | :--- | :--- | | At-risk servicing portfolio | $64,450,319 | $59,498,851 | 8% | | Defaulted loans | $108,530 | $63,264 | 72% | | Defaulted loans (% of at-risk) | 0.17% | 0.11% | - | - As of March 31, 2025, there were **eight at-risk loans in default**, compared to **six loans** a year prior, with associated collateral-based reserves of **$7.5 million**[19](index=19&type=chunk) - A provision for credit losses of **$3.7 million** was recorded in Q1 2025, primarily due to new defaults and an increase in the at-risk servicing portfolio[19](index=19&type=chunk) [Financial Results by Segment](index=5&type=section&id=Financial%20Results%20by%20Segment) Segment performance varied in Q1 2025, with the Capital Markets segment seeing a 25% revenue increase and turning a prior-year loss into a $2.4 million net income driven by higher origination and property sales fees, conversely, the Servicing & Asset Management segment's net income fell 56% to $19.1 million due to decreased investment management and placement fees, and the Corporate segment reported a wider net loss of $18.7 million, up from $24.7 million in the prior year, due to increased operating expenses - Interest expense on corporate debt and income tax expense are determined at a consolidated level and then allocated to each segment[21](index=21&type=chunk) - Consolidated interest expense on corporate debt decreased **12% YoY** due to lower short-term interest rates, however, a **$4.2 million write-off** of unamortized debt issuance costs was recorded in other operating expenses due to a debt refinancing[22](index=22&type=chunk) [Capital Markets](index=6&type=section&id=Capital%20Markets) The Capital Markets segment reported a significant turnaround, with total revenues increasing 25% YoY to $102.6 million, leading to a net income of $2.4 million compared to a net loss of $6.7 million in Q1 2024, driven by a 33% increase in MSR income and a 53% rise in property sales broker fees, reflecting higher Fannie Mae/HUD volumes and strong property sales, despite personnel expenses rising 9% due to higher commissions and $2.4 million in severance costs for underperforming producers Capital Markets Financial Results (in thousands) | Metric | Q1 2025 | Q1 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total revenues | $102,570 | $81,897 | 25% | | Total expenses | $98,029 | $90,227 | 9% | | Walker & Dunlop net income (loss) | $2,360 | $(6,700) | (135)% | - A shift in debt financing mix towards more profitable Fannie Mae and HUD executions led to higher origination fee rates (**0.90% vs 0.84%**) and MSR rates (**0.55% vs 0.40%**)[25](index=25&type=chunk) - Other revenues increased **66%**, primarily due to higher investment banking revenues from several M&A transactions that closed during the quarter[25](index=25&type=chunk) - The company expects to recognize around **$5 million of severance and related expenses** in the first half of 2025, with **$2.4 million** already recorded in Q1[26](index=26&type=chunk) [Servicing & Asset Management](index=7&type=section&id=Servicing%20%26%20Asset%20Management) The Servicing & Asset Management segment experienced a decline in profitability, with total revenues down 7% YoY to $131.9 million and net income falling 56% to $19.1 million, as servicing fees grew 3% due to a larger portfolio, this was more than offset by a 28% drop in investment management fees and a 17% decrease in placement fees and other interest income attributed to lower short-term interest rates, while expenses rose 8% driven by a $3.7 million provision for credit losses and higher personnel costs Servicing & Asset Management Financial Results (in thousands) | Metric | Q1 2025 | Q1 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total revenues | $131,903 | $141,235 | (7)% | | Total expenses | $95,155 | $87,964 | 8% | | Walker & Dunlop net income | $19,126 | $43,283 | (56)% | - Investment management fees decreased due to a reduction in accruals from LIHTC fund asset dispositions and lower realization revenues from private credit strategies[30](index=30&type=chunk) - The provision for credit losses increased significantly to **$3.7 million** from **$0.5 million** in Q1 2024, primarily due to an update to the historical loss factor and new defaults[27](index=27&type=chunk)[33](index=33&type=chunk) [Corporate](index=8&type=section&id=Corporate) The Corporate segment, which includes support functions, reported a net loss of $18.7 million for Q1 2025, a 24% improvement from the $24.7 million loss in Q1 2024, despite an 8% increase in total expenses, with the improvement in net loss due to a larger income tax benefit, and total expenses rising to $38.9 million driven by an 8% increase in both personnel costs (due to higher headcount) and other operating expenses (due to increased professional fees and a debt-related write-off) Corporate Segment Financial Results (in thousands) | Metric | Q1 2025 | Q1 2024 | % Variance | | :--- | :--- | :--- | :--- | | Total revenues | $2,894 | $4,927 | (41)% | | Total expenses | $38,939 | $36,189 | 8% | | Walker & Dunlop net loss | $(18,732) | $(24,717) | (24)% | - Personnel expense increased **8%** due to higher salaries, benefits, and stock compensation from increased average headcount[34](index=34&type=chunk) - Other operating expenses rose **8%**, primarily due to increased professional fees and the write-off of unamortized issuance costs related to the partial paydown of the term loan[34](index=34&type=chunk) [Capital Management and Shareholder Returns](index=9&type=section&id=Capital%20Sources%20and%20Uses) [Capital Management and Shareholder Returns](index=9&type=section&id=Capital%20Sources%20and%20Uses) In Q1 2025, Walker & Dunlop focused on optimizing its capital structure and returning value to shareholders by declaring a Q2 dividend of $0.67 per share, completing a $400 million senior unsecured notes offering due 2033 at 6.625% and using the proceeds to pay down its senior secured term loan to $450 million, extending the maturity to 2032, which resulted in a $4.2 million write-off of deferred issuance costs, and authorizing a new $75 million share repurchase program, under which no shares have yet been repurchased - A dividend of **$0.67 per share** for Q2 2025 was declared, payable on May 29, 2025[36](index=36&type=chunk) - The company issued **$400 million of 6.625% senior unsecured notes** due 2033 and concurrently paid down its senior secured term loan to **$450 million**, extending its maturity to 2032[37](index=37&type=chunk) - A new 12-month, **$75.0 million share repurchase program** was authorized in February 2025, with no repurchases made as of March 31, 2025[39](index=39&type=chunk) [Standard Disclosures](index=9&type=section&id=Standard%20Disclosures) [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP financial measures such as adjusted EBITDA, adjusted core net income, and adjusted core EPS to supplement its GAAP-based financial statements, as management believes these measures provide investors with a better understanding of operating performance, allow for more meaningful period-to-period comparisons, and help identify underlying business trends, though these measures are not intended as a substitute for GAAP and may not be comparable to similarly titled measures of other companies - The company uses **adjusted EBITDA**, **adjusted core net income**, and **adjusted core EPS** to evaluate operating performance, for comparison with forecasts, and for benchmarking against competitors[42](index=42&type=chunk)[45](index=45&type=chunk) - Adjustments to derive these non-GAAP measures typically exclude items like amortization and depreciation, provision for credit losses, MSR income, and certain non-recurring charges like goodwill impairment or write-offs from debt refinancing[44](index=44&type=chunk) [Forward-Looking Statements](index=10&type=section&id=Forward-Looking%20Statements) This section contains standard cautionary language regarding forward-looking statements, which are based on current expectations and projections about future events, these statements are not guarantees of future results and are subject to numerous risks and uncertainties, and the company disclaims any obligation to update these statements and directs readers to its SEC filings, such as the Annual Report on Form 10-K, for a more detailed discussion of risk factors - Forward-looking statements reflect current views and are subject to known and unknown risks that may cause actual results to differ significantly[46](index=46&type=chunk)[47](index=47&type=chunk) - Key risk factors include general economic and real estate market conditions, changes in interest rates, regulatory changes to GSEs or HUD, and changes in federal fiscal and monetary policies[48](index=48&type=chunk) [Financial Statements and Supplemental Data](index=12&type=section&id=Financial%20Statements%20and%20Supplemental%20Data) [Condensed Consolidated Financial Statements](index=12&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements present the company's financial position and results of operations, with the balance sheet as of March 31, 2025, showing total assets of $4.51 billion and total equity of $1.74 billion, and the income statement for Q1 2025 detailing revenues of $237.4 million and net income of $2.8 million, a significant decrease from $11.9 million in Q1 2024, primarily due to higher operating expenses Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $4,511,878 | $4,381,993 | | Total liabilities | $2,767,789 | $2,622,130 | | Total equity | $1,744,089 | $1,759,863 | Condensed Consolidated Income Statement Highlights (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $237,367 | $228,059 | | Total expenses | $232,123 | $214,380 | | Walker & Dunlop net income | $2,754 | $11,866 | [Supplemental Operating and Credit Data](index=14&type=section&id=Supplemental%20Operating%20and%20Credit%20Data) This section provides detailed quarterly trends, showing Q1 2025 total transaction volume of $7.0 billion was up from Q1 2024's $6.4 billion but down from Q4 2024's $13.4 billion, indicating seasonal patterns, while the total servicing portfolio continued its steady growth, reaching $135.6 billion, and key credit metrics show the at-risk portfolio grew to $64.5 billion, with defaulted loans at $108.5 million, an increase both year-over-year and quarter-over-quarter Quarterly Transaction Volume Trend (in thousands) | Volume Type | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Total Debt Financing Volume | $5,196,642 | $9,996,208 | $5,227,308 | | Property Sales Volume | $1,839,290 | $3,450,614 | $1,167,151 | | **Total Transaction Volume** | **$7,035,932** | **$13,446,822** | **$6,394,459** | Quarterly Key Credit Metrics Trend (in thousands) | Metric | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | At-risk servicing portfolio | $64,450,319 | $63,365,672 | $59,498,851 | | Defaulted loans | $108,530 | $41,737 | $63,264 | [Reconciliation of GAAP to Non-GAAP Measures](index=16&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP measures to the company's non-GAAP metrics, for Q1 2025, Walker & Dunlop's net income of $2.8 million is reconciled to an Adjusted EBITDA of $65.0 million by adjusting for items such as income tax, interest, amortization, MSR income, and a $4.2 million write-off of debt issuance costs, similarly, net income is reconciled to an Adjusted Core Net Income of $29.2 million, resulting in an Adjusted Core EPS of $0.85, which management believes better reflects core operating performance Q1 2025 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Item | Amount | | :--- | :--- | | **Walker & Dunlop Net Income** | **$2,754** | | Income tax expense | $2,519 | | Interest expense on corporate debt | $15,514 | | Amortization and depreciation | $57,621 | | Provision for credit losses | $3,712 | | MSR income | $(27,811) | | Other adjustments | $10,657 | | **Adjusted EBITDA** | **$64,966** | Q1 2025 Reconciliation of Diluted EPS to Adjusted Core EPS | Metric | Amount | | :--- | :--- | | Diluted EPS | $0.08 | | Adjustments (per share) | $0.77 | | **Adjusted Core EPS** | **$0.85** |