Newmark(US:NMRK)2025-07-30 12:34Financial Performance - Total Revenues for Q2 2025 reached $759.1 million, a 19.9% increase compared to $633.4 million in Q2 2024[3] - GAAP EPS increased by 38% to $0.11 from $0.08 year-over-year, while Adjusted EPS rose by 41% to $0.31 from $0.22[3] - Management Services, Servicing Fees, and Other revenues grew by 13.6%, marking the eighth consecutive quarter of year-on-year improvement[4] - Capital Markets revenues surged by 37.9%, with significant activity in data centers and Newmark being ranked as the 1 Office Investment Sales Broker in the U.S.[5] - The company expects Adjusted EPS for the full year 2025 to be between $1.47 and $1.57, representing a year-over-year increase of 20% to 28%[3] - Leasing fees increased by 13.8%, driven by heightened activity from retail and office clients in major U.S. cities[5] - Total revenues for Q2 2025 reached $759.1 million, a 19.8% increase from $633.4 million in Q2 2024[39] - Net income available to common stockholders for Q2 2025 was $20.8 million, compared to $14.3 million in Q2 2024, representing a 45.5% increase[39] - Basic earnings per share for Q2 2025 was $0.12, up from $0.08 in Q2 2024, reflecting a 50% increase[39] - Adjusted Earnings before noncontrolling interests and taxes for Q2 2025 was $89.9 million, up from $65.0 million in Q2 2024, representing a 38.2% increase[85] - Adjusted EBITDA for the three months ended June 30, 2025, was $114.0 million, up 32.2% from $86.3 million in the same period of 2024[95] Expenses and Liabilities - Total expenses under GAAP for Q2 2025 were $716.6 million, a 19.8% increase from $598.3 million in Q2 2024[8] - Compensation and employee benefits expenses rose to $455.0 million in Q2 2025, up 20.5% from $377.5 million in Q2 2024[39] - Total liabilities increased to $3.86 billion as of June 30, 2025, compared to $3.17 billion at the end of 2024, a rise of 21.7%[37] - The provision for income taxes for Adjusted Earnings was $12.5 million in Q2 2025, compared to $9.7 million in Q2 2024, reflecting a 29.0% increase[87] Cash Flow and Liquidity - Net cash provided by operating activities for Q2 2025 was $(379.7) million, compared to $(258.5) million in Q2 2024, indicating a decline in cash flow[41] - The company reported a net increase in cash and cash equivalents and restricted cash of $41.9 million for Q2 2025, compared to $39.5 million in Q2 2024[41] - Newmark's liquidity, defined as cash and cash equivalents plus marketable securities, is crucial for assessing available cash on short notice[80] - The company reported a Free Cash Flow of $(386.2) million for the three months ended June 30, 2025, compared to $(267.8) million in the same period of 2024[103] - Newmark's net cash used in operating activities was $(379.7) million for the three months ended June 30, 2025, compared to $(258.5) million in 2024[103] Shareholder Actions - Newmark repurchased approximately 10.8 million shares at $11.58 per share, with $246.4 million remaining in the share repurchase authorization as of June 30, 2025[11] - The company declared a quarterly dividend of $0.03 per share, payable on August 29, 2025[16] - Newmark continues to target an annual share count growth of 2% or less over time[17] - The number of common stock outstanding increased to 179.6 million as of June 30, 2025, from 173.5 million in 2024[101] Future Outlook - Newmark's FY 2025 total revenue outlook is projected to be between $3,050 million and $3,250 million, representing a year-over-year increase of 11% to 19%[17] - Adjusted Earnings Per Share for FY 2025 is expected to be between $1.47 and $1.57, reflecting a growth of 20% to 28% compared to FY 2024[17] - Adjusted EBITDA for FY 2025 is forecasted to be between $523 million and $573 million, indicating a year-over-year increase of 17% to 29%[17] - The company anticipates providing forward-looking guidance for GAAP revenues and certain non-GAAP measures, but not for other GAAP results due to forecasting challenges[82] Adjusted Earnings and Non-GAAP Measures - Newmark's Adjusted Earnings exclude various GAAP items that management believes do not reflect the Company's underlying performance, including compensation-related items from cost-saving initiatives[53] - The calculation of Adjusted Earnings excludes non-cash GAAP gains related to originated mortgage servicing rights (OMSRs), which represent the fair value of expected future cash flows from servicing[54] - Newmark's Adjusted EBITDA is defined as GAAP net income available to common stockholders, adjusted for items such as OMSR revenue and equity-based compensation[70] - Newmark's management believes that Adjusted Earnings and Adjusted EBITDA provide a clearer understanding of the Company's financial performance and underlying operating results[68] - Newmark's Adjusted EBITDA is not a recognized measurement under GAAP and should be used in conjunction with GAAP measures of net income when evaluating operating performance[73] Debt and Leverage - As of June 30, 2025, Newmark's cash and cash equivalents were $195.8 million, down from $197.7 million at the end of 2024, while total corporate debt increased to $871.2 million from $670.7 million[13] - The company reported a net leverage ratio of 1.4 times as of June 30, 2025[13] - Total corporate debt as of June 30, 2025, was $871.2 million, resulting in a net leverage ratio of 1.4 times based on trailing twelve-month Adjusted EBITDA of $498.7 million[102] - Newmark's net leverage is calculated as net debt divided by trailing twelve-month Adjusted EBITDA, providing insight into the company's financial leverage[81] Notable Transactions and Hires - Newmark facilitated significant transactions in 2025, including a $7.1 billion construction loan for an AI data center and a $675 million refinancing for Independence Plaza in Manhattan[30] - Recent notable hires include industry veterans to enhance Newmark's market-leading debt and structured finance offerings and expand its presence in key regions[29]