Cushman & Wakefield(CWK) - 2025 Q2 - Quarterly Results

Financial Highlights and Executive Summary Cushman & Wakefield reported strong Q2 and H1 2025 results, driven by Capital Markets and Leasing, leading to a raised full-year outlook and strengthened balance sheet Executive Summary Cushman & Wakefield reported strong second quarter 2025 results, highlighting significant growth in Capital Markets and Leasing revenues, achieving 95% adjusted earnings per share growth in the first half, and increasing its full-year outlook - The CEO highlighted the success of the company's growth engine, with strong performance in Capital Markets and Leasing, leading to a raised full-year earnings per share outlook[2] - The company announced an additional $150.0 million term loan debt repayment, reinforcing its focus on fortifying the balance sheet[1][2] Second Quarter 2025 Highlights In the second quarter of 2025, the company demonstrated robust growth with a 9% increase in total revenue to $2.5 billion, a substantial rise in net income to $57.3 million, driven by a 27% surge in Capital Markets revenue and an 8% increase in Leasing revenue Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $2.5 billion | $2.3 billion | +9% | | Service Line Fee Revenue | $1.7 billion | $1.6 billion | +7% | | Net Income | $57.3 million | $13.5 million | +324% | | Diluted EPS | $0.25 | $0.06 | +317% | | Adjusted EBITDA | $161.7 million | $138.9 million | +16% | | Adjusted Diluted EPS | $0.30 | $0.20 | +50% | - Capital markets revenue grew 27% (26% in local currency), marking the third consecutive quarter of double-digit year-over-year growth[1][5] - Leasing revenue increased by 8%, showing strength across all major asset classes[1][5] Year-to-Date 2025 Highlights For the first half of 2025, revenue increased by 7% to $4.8 billion, with a significant turnaround in profitability to a net income of $59.2 million, Adjusted EBITDA growth of 19% to $257.9 million, and strong liquidity at $1.7 billion YTD 2025 Key Financial Metrics | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $4.8 billion | $4.5 billion | +7% | | Net Income (Loss) | $59.2 million | ($15.3 million) | +$74.5 million | | Diluted EPS (Loss) | $0.25 | ($0.07) | +$0.32 | | Adjusted EBITDA | $257.9 million | $217.0 million | +19% | | Adjusted Diluted EPS | $0.39 | $0.20 | +95% | - Liquidity as of June 30, 2025 was strong at $1.7 billion, comprising $1.1 billion in undrawn revolving credit and $0.6 billion in cash[5] Consolidated Financial Results The company achieved broad-based revenue growth and significant profitability improvements in Q2 and H1 2025, reversing prior-year losses Consolidated Results Table The consolidated results show broad-based revenue growth across all service lines for both the second quarter and first half of 2025, notably a 27% surge in Capital Markets revenue in Q2, driving significant improvements in operating income, net income, and Adjusted EBITDA Consolidated Financial Performance (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $2,483.9 | $2,288.0 | 9% | $4,768.5 | $4,472.8 | 7% | | Operating Income | $122.8 | $70.4 | 74% | $168.1 | $89.2 | 88% | | Net Income (Loss) | $57.3 | $13.5 | n.m. | $59.2 | ($15.3) | n.m. | | Adjusted EBITDA | $161.7 | $138.9 | 16% | $257.9 | $217.0 | 19% | | Diluted EPS (Loss) | $0.25 | $0.06 | 317% | $0.25 | ($0.07) | n.m. | | Adjusted Diluted EPS | $0.30 | $0.20 | 50% | $0.39 | $0.20 | 95% | Detailed Financial Performance Analysis Q2 and H1 2025 performance was marked by robust revenue growth in Capital Markets and Leasing, coupled with cost savings and reduced interest expense, driving substantial profit increases Second Quarter 2025 Performance Analysis Q2 2025 revenue grew 9% to $2.5 billion, propelled by a 27% increase in Capital Markets and 8% in Leasing, particularly in the Americas, with net income surging to $57.3 million due to revenue growth, cost savings, and a 13% reduction in interest expense, leading to a 16% rise in Adjusted EBITDA - Total revenue increased by $195.9 million (9%), driven by a 27% rise in Capital markets revenue and an 8% increase in Leasing revenue[7] - Interest expense decreased by 13% to $53.2 million due to lower outstanding principal on term loans from prepayments and favorable repricings[11] - Net income increased by $43.8 million, driven by growth in Services, Leasing, and Capital markets, cost savings, and lower interest and depreciation expenses[14] - Adjusted EBITDA increased 16% to $161.7 million, and the Adjusted EBITDA margin improved by 75 basis points to 9.5%[15] Year-to-Date 2025 Performance Analysis For the first half of 2025, revenue increased 7% to $4.8 billion, led by 20% growth in Capital Markets and 8% in Leasing, achieving a net income of $59.2 million, a $74.5 million improvement from a net loss in the prior year, supported by lower interest expense, reduced restructuring charges, and cost savings, with Adjusted EBITDA growing 19% to $257.9 million - Year-to-date revenue grew by $295.7 million (7%), primarily driven by Capital markets and Leasing revenue growth of 20% and 8%, respectively[16] - Total costs of services as a percentage of total revenue improved, decreasing from 83% in H1 2024 to 82% in H1 2025[17] - The company shifted from a net loss of $15.3 million in H1 2024 to a net income of $59.2 million in H1 2025, an improvement of $74.5 million[23] - Adjusted EBITDA for the first half increased by 19% to $257.9 million, with the margin expanding by 92 basis points to 8.0%[24] Balance Sheet and Liquidity Cushman & Wakefield maintained strong liquidity and actively managed its debt profile through prepayments and repricing, reinforcing financial stability Liquidity and Debt Management As of June 30, 2025, Cushman & Wakefield maintained a strong liquidity position of $1.7 billion and net debt of $2.3 billion, actively managing its debt profile through $200 million in principal prepayments year-to-date and repricing nearly $950 million of its term loans to lower interest costs by 50 basis points - Total liquidity was $1.7 billion at the end of Q2, consisting of a $1.1 billion undrawn revolving credit facility and $0.6 billion in cash and cash equivalents[25] - Net debt stood at $2.3 billion as of June 30, 2025[26] - The company repriced $947.5 million of its term loans, reducing the interest rate by 50 basis points, and prepaid an additional $150.0 million in principal, bringing year-to-date prepayments to $200.0 million[27] Financial Statements (Unaudited) Unaudited statements for Q2 and H1 2025 demonstrate consistent revenue growth, improved operating income, and a positive shift in net income, alongside a stable balance sheet and managed cash flows Condensed Consolidated Statements of Operations The unaudited statements of operations detail the company's financial performance for the three and six months ended June 30, 2025, compared to the same periods in 2024, showing clear revenue growth leading to significant improvements in operating income and a shift from a net loss to net income year-to-date Statement of Operations Highlights (in millions) | Line Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $2,483.9 | $2,288.0 | $4,768.5 | $4,472.8 | | Operating Income | $122.8 | $70.4 | $168.1 | $89.2 | | Earnings (Loss) Before Taxes | $76.2 | $17.2 | $81.2 | ($9.3) | | Net Income (Loss) | $57.3 | $13.5 | $59.2 | ($15.3) | Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows total assets of $7.56 billion, remaining stable compared to year-end 2024, with total liabilities decreasing to $5.65 billion from $5.79 billion primarily due to reduced long-term debt, consequently increasing total shareholders' equity from $1.76 billion to $1.90 billion Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $2,637.1 | $2,690.4 | | Total Assets | $7,555.4 | $7,549.2 | | Total Current Liabilities | $2,325.5 | $2,329.9 | | Long-term debt, net | $2,820.4 | $2,939.6 | | Total Liabilities | $5,651.3 | $5,793.8 | | Total Equity | $1,904.1 | $1,755.4 | Condensed Consolidated Statements of Cash Flows For the first six months of 2025, net cash used in operating activities was $152.4 million, an increase from $103.3 million in the prior year, mainly due to changes in working capital, with net cash provided by investing activities at $31.1 million and net cash used in financing activities at $77.6 million, ending the period with a cash balance of $646.0 million Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($152.4) | ($103.3) | | Net Cash Provided by Investing Activities | $31.1 | $56.9 | | Net Cash Used in Financing Activities | ($77.6) | ($140.5) | | Effect of Exchange Rate | $30.3 | ($9.4) | | Net Change in Cash | ($198.9) | ($186.9) | | Cash at End of Period | $646.0 | $604.9 | Segment Results All geographical segments, Americas, EMEA, and APAC, contributed to overall revenue growth in Q2 2025, with EMEA showing significant Adjusted EBITDA improvement Americas The Americas segment, the company's largest, reported a 5% increase in total revenue to $1.8 billion for Q2 2025, driven by a 29% surge in Capital Markets revenue and a 9% increase in Leasing, with Adjusted EBITDA growing 3% to $112.2 million Americas Q2 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (USD) | | :--- | :--- | :--- | :--- | | Total Revenue | $1,804.1 | $1,713.4 | 5% | | Capital Markets Revenue | $170.9 | $132.3 | 29% | | Leasing Revenue | $382.5 | $352.2 | 9% | | Adjusted EBITDA | $112.2 | $109.0 | 3% | EMEA The EMEA segment delivered strong Q2 2025 results with a 17% increase in total revenue to $259.8 million, showing growth across all service lines, including a 23% rise in Capital Markets, and dramatically improving profitability with Adjusted EBITDA more than doubling to $32.3 million EMEA Q2 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (USD) | | :--- | :--- | :--- | :--- | | Total Revenue | $259.8 | $221.9 | 17% | | Net Income (Loss) | $15.0 | ($4.5) | n.m. | | Adjusted EBITDA | $32.3 | $13.2 | 145% | APAC The APAC segment's total revenue for Q2 2025 grew 19% to $420.0 million, primarily driven by a 63% increase in Gross contract reimbursables, while service line fee revenue saw a more modest 4% increase, and Adjusted EBITDA grew 3% to $17.2 million APAC Q2 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (USD) | | :--- | :--- | :--- | :--- | | Total Revenue | $420.0 | $352.7 | 19% | | Service Line Fee Revenue | $269.8 | $260.3 | 4% | | Adjusted EBITDA | $17.2 | $16.7 | 3% | Non-GAAP Financial Measures and Reconciliations This section clarifies the company's use of non-GAAP metrics like Adjusted EBITDA and Net Income, providing detailed reconciliations to GAAP figures for enhanced transparency and operational insight Use of Non-GAAP Financial Measures This section explains the non-GAAP financial measures used by management, such as Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow, which the company believes provide a better understanding of ongoing operations and enhance comparability by excluding certain items like acquisition costs, restructuring charges, and other non-recurring events - Management uses non-GAAP measures like Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow to evaluate operating performance, develop budgets, and improve comparability of results[44][50] - Adjusted EBITDA is the primary measure of segment profitability and excludes items such as unrealized investment gains/losses, acquisition costs, and non-cash depreciation and amortization[46] - Adjusted Net Income and Adjusted EPS are used to assess profitability, excluding similar items to Adjusted EBITDA and applying an adjusted long-term effective tax rate[48] Reconciliations of Non-GAAP Measures This section provides detailed reconciliations of the company's non-GAAP financial measures to their most directly comparable GAAP figures, including tables that bridge Net Income (Loss) to Adjusted EBITDA and Adjusted Net Income, as well as a reconciliation of net cash from operations to Free Cash Flow, offering transparency into the adjustments made Reconciliation of Net Income to Adjusted EBITDA (in millions) | Line Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $57.3 | $13.5 | $59.2 | ($15.3) | | Adjustments | $104.4 | $125.4 | $198.7 | $232.3 | | Adjusted EBITDA | $161.7 | $138.9 | $257.9 | $217.0 | Reconciliation of Net Income to Adjusted Net Income (in millions) | Line Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $57.3 | $13.5 | $59.2 | ($15.3) | | Adjustments | $16.4 | $45.4 | $38.8 | $72.7 | | Tax impact of adjustments | ($4.2) | ($13.2) | ($8.0) | ($11.1) | | Adjusted net income | $69.5 | $45.7 | $90.0 | $46.3 | Reconciliation to Free Cash Flow - H1 (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($152.4) | ($103.3) | | Payment for property and equipment | ($13.9) | ($22.3) | | Free cash flow | ($166.3) | ($125.6) |