Group 1: Stock Performance and Price Targets - Walker & Dunlop (WD) shares have increased by 1.1% over the past four weeks, closing at $86.28, with a mean price target of $108.33 indicating a potential upside of 25.6% [1] - The average price target ranges from a low of $105 to a high of $115, with a standard deviation of $5.77, suggesting a 21.7% increase at the lowest estimate and a 33.3% upside at the highest [2] - Analysts' growing optimism regarding WD's earnings prospects is supported by strong agreement in revising EPS estimates higher, which correlates with near-term stock price movements [9][10] Group 2: Analyst Insights and Consensus - The Zacks Consensus Estimate for WD has increased by 4.2% over the past month, indicating positive sentiment among analysts [10] - WD holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential upside [11] - A tight clustering of price targets, indicated by a low standard deviation, reflects a high degree of agreement among analysts about the stock's price movement direction [7]

Part I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Walker & Dunlop provides commercial real estate services and finance, primarily in the U.S. multifamily sector, operating through three core segments - The company operates through three reportable segments: Capital Markets, Servicing & Asset Management, and Corporate, determined by the product or service provided[18](index=18&type=chunk) - The company's growth strategy, targeting **$2 billion** in annual revenues by the end of 2025, is unlikely to be achieved on schedule due to macroeconomic disruptions, though long-term goals remain[57](index=57&type=chunk)[59](index=59&type=chunk) - As of December 31, 2024, the company employed **1,399** people, a **6%** increase from the prior year, with a stable **8%** voluntary annualized turnover rate[69](index=69&type=chunk)[73](index=73&type=chunk) [Capital Markets](index=4&type=section&id=Capital%20Markets) The Capital Markets segment offers diverse commercial real estate finance products, including Agency lending, debt brokerage, property sales, and housing market research - The company is one of **25** approved Fannie Mae DUS lenders, sharing in the risk of loss on originated loans, typically capped at **20%** of the loan amount[20](index=20&type=chunk) - As one of **23** approved Freddie Mac lenders, the company originates and sells various multifamily loans, rarely having risk-sharing arrangements unlike the Fannie Mae DUS program[24](index=24&type=chunk) - The company is an approved HUD MAP and LEAN lender and Ginnie Mae issuer, providing construction and permanent loans for multifamily, affordable, and healthcare facilities, with minimal risk of loss due to U.S. government backing[25](index=25&type=chunk)[26](index=26&type=chunk) - Through its subsidiary Zelman & Associates, the company provides housing market research and M&A advisory services, becoming a wholly-owned subsidiary in Q4 2024 after Walker & Dunlop purchased the remaining **25%** interest[36](index=36&type=chunk) [Servicing & Asset Management](index=7&type=section&id=Servicing%20%26%20Asset%20Management) The Servicing & Asset Management segment generates recurring revenue from servicing fees, asset management fees, and net interest income, managing a loan portfolio and investment funds - The company retains servicing rights on nearly all Agency loans it originates, generating fees from servicing, escrow deposit placements, and other ancillary services[39](index=39&type=chunk) - Through its investment management subsidiary WDIP, the company manages **$2.3 billion** in regulatory assets under management (AUM) across various debt and equity funds, launching Debt Fund I in Q4 2023 and closing the first round of Debt Fund II in Q4 2024[47](index=47&type=chunk)[48](index=48&type=chunk) - The company provides affordable housing services through its subsidiary WDAE, one of the largest LIHTC syndicators in the U.S., forming LIHTC funds with third-party investors and earning syndication and asset management fees as general partner[51](index=51&type=chunk) [Our Growth Strategy](index=10&type=section&id=Our%20Growth%20Strategy) The company's 2025 growth strategy targets significant increases in revenues, debt financing, property sales, and AUM, though macroeconomic challenges have delayed most milestones Progress Towards 2025 Milestones | Milestone (in thousands) | 2021 | 2022 | 2023 | 2024 | 2025 Milestone | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $ 1,259,178 | $ 1,258,753 | $ 1,054,440 | $ 1,132,490 | $ 2,000,000 | | Debt financing volume | 48,911,120 | 43,605,984 | 24,202,859 | 30,154,666 | 60,000,000 | | Small balance lending volume | 515,757 | 745,686 | 634,280 | 750,388 | 5,000,000 | | Property sales volume | 19,254,697 | 19,732,654 | 8,784,537 | 9,751,223 | 25,000,000 | | Servicing portfolio | 115,700,564 | 123,133,855 | 130,471,524 | 135,287,012 | 160,000,000 | | Assets under management | 16,437,865 | 16,748,449 | 17,321,452 | 18,423,463 | 10,000,000 | [Item 1A. Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its business operations, regulatory environment, and corporate structure, including reliance on Agencies and potential DUS program losses - A primary risk is the potential loss of, or changes in, relationships with the Agencies (Fannie Mae, Freddie Mac, HUD), which are the source for all of its loans held for sale[83](index=83&type=chunk) - The company is subject to significant risk of loss from its Fannie Mae DUS program, generally absorbing the first **5%** of losses on a defaulted loan, with a maximum loss capped at **20%** of the original principal balance, with an at-risk servicing portfolio of **$63.4 billion** as of December 31, 2024[91](index=91&type=chunk) - The company may be required to repurchase loans or indemnify purchasers if there is a breach of representations or warranties, with **five** such requests in 2024 totaling **$87.3 million** in unpaid principal balance, resulting in a **$14.2 million** provision for credit losses[100](index=100&type=chunk) - The company is highly dependent on short-term warehouse facilities to fund its loan originations, with **$3.8 billion** of committed and uncommitted loan funding available through **five** commercial banks as of December 31, 2024, where termination or non-renewal would materially impact its ability to originate loans[97](index=97&type=chunk) [Item 1C. Cybersecurity](index=25&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program, guided by NIST CSF and overseen by the Audit and Risk Committee, manages risks and has not identified any material past incidents - The cybersecurity risk management program is guided by the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF)[154](index=154&type=chunk) - Oversight is provided by the Board's Audit and Risk Committee, which receives quarterly reports from the Chief Information Security Officer (CISO)[156](index=156&type=chunk)[158](index=158&type=chunk) - The company has not identified any past cybersecurity threats or incidents that have materially affected its operations, business strategy, results, or financial condition[156](index=156&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Walker & Dunlop's common stock trades on the NYSE, with the company paying quarterly dividends and having a share repurchase program, though no shares were repurchased in 2024 - During 2024, the Board of Directors declared and paid four quarterly dividends totaling **$2.60 per share**, with the dividend increased by **3%** to **$0.67 per share** for the first quarter of 2025[168](index=168&type=chunk) - A share repurchase program authorized for up to **$75.0 million** was in place for 2024, but no shares were purchased under it, with a new **$75.0 million** program authorized for a **12-month** period beginning February 21, 2025[173](index=173&type=chunk) Common Stock Repurchases for Q4 and Year Ended Dec 31, 2024 | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Purchased as Part of Publicly Announced Programs | Value of Shares that May Yet Be Purchased Under Programs | | :--- | :--- | :--- | :--- | :--- | | **4th Quarter 2024** | **3,375** | **$109.52** | **—** | **$75,000,000** | | October 1-31, 2024 | 997 | $110.82 | — | $75,000,000 | | November 1-30, 2024 | 2,378 | $108.97 | — | $75,000,000 | | December 1-31, 2024 | — | — | — | $75,000,000 | | **Total Year 2024** | **126,744** | **N/A** | **—** | **$75,000,000** | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Total revenues increased **7%** to **$1.13 billion** in 2024, but net income remained flat due to higher expenses and a **$14.2 million** provision for credit losses Consolidated Financial Results (2024 vs. 2023) | (in thousands) | 2024 | 2023 | Dollar Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | **$1,132,490** | **$1,054,440** | **$78,050** | **7%** | | **Total expenses** | **$1,000,989** | **$916,243** | **$84,746** | **9%** | | Income from operations | $131,501 | $138,197 | $(6,696) | (5%) | | **Walker & Dunlop net income** | **$108,167** | **$107,357** | **$810** | **1%** | Total Transaction Volume (2024 vs. 2023) | Transaction Volume (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Debt Financing Volume | $30,154,666 | $24,202,859 | | Property Sales Volume | $9,751,223 | $8,784,537 | | **Total Transaction Volume** | **$39,905,889** | **$32,987,396** | - The commercial real estate market in 2024 was challenged by elevated interest rates and slower rent growth, but showed signs of recovery in the second half of the year, leading to increased transaction volumes, with GSEs' combined lending caps for 2025 set at **$146 billion**, a **22%** increase over 2024 volumes[214](index=214&type=chunk)[216](index=216&type=chunk)[220](index=220&type=chunk) - A goodwill impairment of **$33.0 million** was recognized in 2024, attributed to one of the reporting units associated with the GeoPhy acquisition, due to challenging macroeconomic conditions and lower projected cash flows[211](index=211&type=chunk)[244](index=244&type=chunk) [Critical Accounting Estimates](index=30&type=section&id=Critical%20Accounting%20Estimates) Management identifies MSRs, Allowance for Risk-Sharing, Contingent Consideration, and Goodwill as critical accounting estimates, with a **$33.0 million** goodwill impairment in 2024 - The fair value of Mortgage Servicing Rights (MSRs) is a critical estimate, highly sensitive to assumptions like discount rates and placement fees on escrow accounts, where a **100-basis point** change in the discount rate would impact capitalized MSRs for 2024 by **3%**[194](index=194&type=chunk)[196](index=196&type=chunk) - The Allowance for Risk-Sharing Obligations is calculated using a CECL model based on the weighted-average remaining maturity (WARM) method, with the estimate sensitive to the forecasted loss rate; a **10%** change in this rate as of December 31, 2024, would change the allowance by **8%**[198](index=198&type=chunk)[204](index=204&type=chunk) - Contingent consideration liabilities from acquisitions are remeasured to fair value periodically, with revised forecasts in 2024 leading to a **$50.3 million** reduction in these liabilities, including a **$34.5 million** reduction for the GeoPhy earnout and a **$10.8 million** reduction for the Alliant earnout[206](index=206&type=chunk)[207](index=207&type=chunk) - Goodwill was impaired by **$33.0 million** in 2024 related to a reporting unit within the Capital Markets segment associated with the GeoPhy acquisition, due to declines in projected cash flows amid challenging market conditions[211](index=211&type=chunk) [Segment Results](index=45&type=section&id=Segment%20Results) In 2024, Capital Markets net income rose **62%**, Servicing & Asset Management net income decreased **5%**, and Corporate reported a wider net loss due to increased expenses Segment Net Income (Loss) (2024 vs. 2023) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Capital Markets | $66,664 | $41,180 | | Servicing & Asset Management | $157,750 | $166,316 | | Corporate | $(116,247) | $(100,139) | | **Walker & Dunlop Net Income** | **$108,167** | **$107,357** | [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$5.3 billion** in warehouse facilities and **$253.9 million** in operational liquidity, while managing a growing at-risk servicing portfolio - As of December 31, 2024, the company had **$5.3 billion** in total Agency Warehouse Facilities, including **$1.65 billion** committed, to fund its loan originations[550](index=550&type=chunk) - The company was required to maintain **$64.5 million** of liquid assets for operational liquidity and held **$253.9 million** as of December 31, 2024, with its net worth of **$992.6 million** also exceeding the Fannie Mae requirement of **$324.4 million**[341](index=341&type=chunk)[342](index=342&type=chunk) Key Credit Metrics | (in thousands) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total risk-sharing servicing portfolio | $68,211,744 | $63,722,521 | | Total non-risk-sharing servicing portfolio | $67,075,268 | $66,708,864 | | **Total servicing portfolio UPB** | **$135,323,938** | **$130,471,524** | | At risk servicing portfolio | $63,365,672 | $58,801,055 | | Defaulted loans | $41,737 | $27,214 | | Defaulted loans as a % of at-risk portfolio | 0.07% | 0.05% | - In 2024, the company received repurchase demands for **five** loans with an aggregate unpaid principal balance (UPB) of **$87.3 million**, resulting in a **$14.2 million** provision for credit losses and **$10.6 million** in related operating costs[368](index=368&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk affecting placement fees and borrowing costs, and market value risk on MSRs, with a **100-basis point** rate change having a material impact Annual Impact of a 100 Basis Point Change in Interest Rates (as of Dec 31, 2024) | Impact on: | 100 bps Increase (in millions) | 100 bps Decrease (in millions) | | :--- | :--- | :--- | | Placement fee revenue | $26.9 | $(26.9) | | Net warehouse interest income | $(6.2) | $6.2 | | Income from operations (Corporate Debt) | $(7.8) | $7.8 | - The fair value of MSRs is subject to market value risk, where a **100-basis point** increase in the discount rate would decrease the MSR fair value by approximately **$41.9 million** as of December 31, 2024[377](index=377&type=chunk) [Item 9A. Controls and Procedures](index=61&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with an unqualified auditor opinion - Management concluded that both disclosure controls and procedures, and internal control over financial reporting were effective as of December 31, 2024[381](index=381&type=chunk)[382](index=382&type=chunk) - The independent auditor, KPMG LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2024[382](index=382&type=chunk) Part III [Part III](index=61&type=section&id=PART%20III) Part III incorporates information by reference from the company's Proxy Statement, covering directors, executive compensation, security ownership, and related transactions Part IV [Part IV](index=62&type=section&id=PART%20IV) Part IV lists financial statements, schedules, and exhibits filed with the Form 10-K, including consolidated financial statements and the independent auditor's report [Item 15. Exhibits and Financial Statement Schedules](index=62&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed with the Form 10-K, including consolidated financial statements, auditor's report, and various corporate exhibits Financial Statements and Supplementary Data [Reports of Independent Registered Public Accounting Firm](index=74&type=section&id=Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG issued unqualified opinions on the financial statements and internal controls, identifying MSR valuation as a critical audit matter due to subjective judgments - The auditor issued an unqualified opinion, stating the financial statements are presented fairly in all material respects in conformity with U.S. GAAP[419](index=419&type=chunk) - The auditor identified the initial fair value measurement of Mortgage Servicing Rights (MSRs) as a Critical Audit Matter, highlighting the high degree of subjective judgment required to assess key assumptions like the discount rate and placement fee rate[424](index=424&type=chunk)[425](index=425&type=chunk) [Notes to the Consolidated Financial Statements](index=81&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail accounting policies, financial instruments, and operations, including a **$33.0 million** goodwill impairment and a **$14.2 million** provision for credit losses in 2024 - In 2024, the company received repurchase or indemnification requests for **five** loans, resulting in the recognition of loans held for investment and secured borrowings on the balance sheet, a **$14.2 million** provision for credit losses, and **$10.6 million** in other operating expenses[478](index=478&type=chunk)[483](index=483&type=chunk)[485](index=485&type=chunk) Roll Forward of MSRs (in thousands) | | 2024 | 2023 | | :--- | :--- | :--- | | Beginning balance | $907,415 | $975,226 | | Additions, following the sale of loan | 156,984 | 142,129 | | Amortization | (203,600) | (199,633) | | Pre-payments and write-offs | (8,400) | (10,307) | | **Ending balance** | **$852,399** | **$907,415** | Roll Forward of Allowance for Risk-Sharing Obligations (in thousands) | | 2024 | 2023 | | :--- | :--- | :--- | | Beginning balance | $31,601 | $44,057 | | Provision (benefit) for risk-sharing obligations | (974) | (10,448) | | Write-offs | (468) | (2,008) | | Other | (2,000) | — | | **Ending balance** | **$28,159** | **$31,601** | - A single customer (Fannie Mae) represented **35.6%** of total revenues for the year ended December 31, 2024[679](index=679&type=chunk)

Q4 Q4 2024 EARNINGS While forward-looking statements reflect our good faith projections, assumptions and expectations, they are not guarantees of future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law. Factors that could cause our results to differ materially include, but are not limited to: ...

Financial Data and Key Metrics Changes - The company closed total transaction volume of $13.4 billion in Q4 2024, up 45% year-over-year, generating diluted earnings per share of $1.32, up 42% from Q4 2023 [7] - Q4 adjusted EBITDA was $95 million, up 8% year-over-year, while adjusted core EPS was $1.34, down 6% from last year [8] - Full year diluted EPS was $3.19, flat from 2023, adjusted core EPS was $4.97, up 6%, and adjusted EBITDA reached a record level of $329 million, up 9% from 2023 [8][23] Business Line Data and Key Metrics Changes - Agency loan originations totaled $4.9 billion in Q4, with revenues from mortgage servicing rights up 62% from Q4 2023 [8] - The Capital Markets segment saw transaction volumes grow 45% year-over-year, with segment revenue surging 40% to $181 million [26][27] - The Servicing & Asset Management (SAM) segment generated revenues of $157 million, up 13% year-over-year, with servicing fees increasing by 4% [28] Market Data and Key Metrics Changes - Fannie Mae lending volume was $3.2 billion in Q4, up 91% from Q4 2023, while Freddie Mac loan originations grew by 19% to $1.6 billion [9][10] - The company finished the year as Fannie Mae's largest DUS partner for the sixth consecutive year [9] - The property sales team closed $3.5 billion in transactions in Q4, up 20% year-over-year, with total property sales for the year reaching $9.8 billion, up 11% from 2023 [11] Company Strategy and Development Direction - The company plans to continue investing in its Capital Markets business and expand its service offerings, including entering the hospitality sector and enhancing its affordable housing platform [57][58] - The company is focused on achieving its five-year growth plan called Drive to '25, which includes scaling its servicing and asset management businesses [62] - The company is optimistic about the commercial real estate market's recovery and aims to leverage its client relationships and transaction expertise to generate growth [42][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying fundamentals of the multifamily sector, noting strong rent growth and significant capital available for deployment [43][44] - The company anticipates a choppy market in 2025 but expects growth driven by increased transaction activity and cash origination fees [45][46] - Management acknowledged challenges such as inflation and interest rate fluctuations but remains optimistic about the company's positioning and growth potential [42][50] Other Important Information - The company increased its quarterly dividend for the seventh consecutive year to $0.67 per share, reflecting its strong cash generation capabilities [41] - The company has implemented new process controls to mitigate credit risks and has established a special asset management group to manage repurchased loans [20][36] Q&A Session Summary Question: Opportunities for formal alignment with alternative asset managers - Management indicated that while partnerships are always a possibility, they are confident in their ability to scale their asset management business independently [66][67] Question: Outlook for low-income housing tax credit syndication business - Management expressed confidence in the growth of the affordable housing business, supported by recent management changes and the importance of low-income housing tax credits [68][70] Question: Drivers behind Fannie Mae's strong performance - Management clarified that the strong performance was due to standard deal flow rather than a few large transactions, with servicing fees under pressure due to market conditions [73][75] Question: Completeness of the W&D business model - Management stated that while they feel well-positioned, they are always looking to improve and expand their service offerings to remain competitive [79][81] Question: Market conditions for distressed assets - Management noted that while some assets may face distress, the overall market is not expected to experience broad-scale distress due to the availability of capital [90][91] Question: Updates on GSE privatization discussions - Management indicated that privatization of Fannie Mae and Freddie Mac is a topic of discussion, with potential implications for the market depending on political developments [95][98] Question: Expansion into hospitality market - Management highlighted the opportunity in the hospitality sector, noting the strong performance of leisure hospitality and the potential for growth despite challenges in urban markets [99][106]

Core Insights - Walker & Dunlop reported significant growth in revenue and net income for Q4 2024, exceeding analyst expectations despite challenges in adjusted earnings [2][6][7] - The company achieved total revenue of $341.5 million, a 24.5% increase year-over-year, and net income of $44.8 million, up 42% from the previous year [3][7] Financial Performance - Adjusted Core EPS was $1.34, surpassing the forecast of $1.225 but down 6% from $1.42 in Q4 2023 [3][8] - Total transaction volume reached $13.4 billion, reflecting a 45% increase compared to $9.3 billion in Q4 2023 [3][6] - The Capital Markets segment saw a 56% increase in debt financing volume, contributing significantly to revenue growth [6] Business Overview - Walker & Dunlop specializes in commercial real estate finance, maintaining strong relationships with government-sponsored enterprises like Fannie Mae and Freddie Mac [4] - The company focuses on technology integration to enhance efficiency and expand market reach, utilizing platforms like Apprise and GeoPhy [4][9] Strategic Focus - The company is concentrating on increasing transaction volumes and expanding its servicing portfolio, which grew to $135.3 billion [5][6] - Investment management and affordable housing initiatives are key components of revenue diversification [5] Market Outlook - Management remains optimistic about market conditions and anticipates further growth in transaction volumes, positioning the company to benefit from a recovering real estate market [10][11] - A strategic focus on technology-driven service offerings is planned to maintain a competitive edge in the industry [11]

Walker & Dunlop (WD) came out with quarterly earnings of $1.34 per share, missing the Zacks Consensus Estimate of $1.52 per share. This compares to earnings of $1.42 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -11.84%. A quarter ago, it was expected that this provider of commercial real estate financial services would post earnings of $1.29 per share when it actually produced earnings of $1.19, delivering a surprise of -7. ...

Fourth quarter 2024 Earnings Release Exhibit 99.1 Walker & Dunlop Reports Fourth Quarter 2024 Financial Results 42% Increase in Net Income and Diluted Earnings per Share Generate Strong Finish to 2024 FOURTH QUARTER 2024 HIGHLIGHTS FULL-YEAR 2024 HIGHLIGHTS ● Total transaction volume of $39.9 billion, up 21% from 2023 BETHESDA, MD – FEBRUARY 13, 2025 – Walker & Dunlop, Inc. (NYSE: WD) (the "Company," or "Walker & Dunlop") reported quarterly total transaction volume of $13.4 billion, up 45% from the fourth q ...

The market expects Walker & Dunlop (WD) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on February 13, 2025, might help the stock move higher if these key numbe ...

Financial Data and Key Metrics Changes - Total transaction volume in Q3 2024 reached $11.6 billion, representing a 36% increase year-over-year and a 37% increase sequentially from Q2 2024 [7][16] - Diluted earnings per share grew 33% year-over-year to $0.85 per share [7][16] - Adjusted EBITDA and adjusted core EPS increased by 7% [7][16] - Year-to-date diluted earnings per share decreased 17% to $1.87 due to low transaction activity in the first half of the year [27] Business Line Data and Key Metrics Changes - Property sales volume in Q3 was $3.6 billion, up 44% year-over-year, with a significant increase from $1.2 billion in Q1 to $3.6 billion in Q3 [8][12] - GSE loan volumes increased to $3.5 billion in Q3, with a year-to-date total of $68 billion [9][12] - The SAM segment managed a total portfolio of $152 billion, including a $134 billion servicing portfolio [21][22] - Revenues from the SAM segment declined 2% despite a 3% increase in servicing fees, primarily due to lower syndication revenues [22] Market Data and Key Metrics Changes - The affordable housing sector saw HUD lending volumes grow over 200% to $272 million in Q3 [12][13] - The company moved up to the second largest HUD multifamily lender in 2024 [13] - The construction starts for new multifamily properties dropped dramatically in 2024, indicating a potential undersupplied market in 2026 and 2027 [37] Company Strategy and Development Direction - The company is focused on leveraging its investments in people, brand, and technology to grow financial results and expand market presence in commercial real estate financing [6][15] - The strategy includes maintaining a strong servicing portfolio to generate stable recurring revenues and weather market cycles [14][15] - The integration of AI into processes is a key part of the company's technology strategy to improve efficiency and client service [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the commercial real estate market, driven by increased transaction activity and a stable macroeconomic environment [16][17] - The company anticipates continued growth in loan origination volumes and a strong finish to 2024 [30][31] - Management highlighted the importance of monitoring equity capital deployment and M&A activity as potential drivers of transaction volumes [80][81] Other Important Information - The company ended Q3 with $180 million in cash and an additional $30 million in short-term investments [32] - A quarterly dividend of $0.65 per share was approved by the Board of Directors [33] Q&A Session Summary Question: How much of the property sales volume was pull-through from the pipeline? - Management indicated that the gestation period for property transactions is longer than a quarter, making it difficult to attribute specific volumes to the previous quarter's pipeline [50][51] Question: Is there a shift between refinance and purchase deals? - Management noted that the Q4 pipeline is overweighted towards refinancing activity, but acquisition financing is still moving forward [53][54] Question: What happens if the 10-year treasury goes to 5%? - Management stated that while they cannot predict rates, they believe the multifamily market will remain strong as the gap between multifamily and single-family housing increases [56][58] Question: Are there any lingering issues that could affect the GSEs? - Management expressed optimism about the potential for GSE reform and the desire to get them out of conservatorship without market disruption [72][73] Question: Why did total revenues only increase 9% despite a 36% increase in transaction volume? - Management explained that the revenue mix between capital markets and the SAM segment affects overall revenue growth, with servicing fees being recognized in subsequent quarters [66][67] Question: What is the outlook for the tax syndication business? - Management expects growth in the tax syndication business in 2025, driven by a focus on affordable housing and low-income housing tax credits [63][64]

Walker & Dunlop (WD) reported $292.3 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 8.8%. EPS of $1.19 for the same period compares to $1.11 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $298.58 million, representing a surprise of -2.10%. The company delivered an EPS surprise of -7.75%, with the consensus EPS estimate being $1.29.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings - ...