Jones Lang LaSalle(JLL) - 2025 Q2 - Quarterly Results

Financial Highlights Overview of JLL's strong Q2 2025 performance, with double-digit revenue growth and increased profitability Q2 2025 Performance Summary JLL achieved its fifth consecutive quarter of double-digit revenue growth in Q2 2025, with revenue up 11% and EPS rising 32% Q2 & H1 2025 Key Financial Results | Metric | Q2 2025 | Q2 2024 | % Change (USD) | H1 2025 | H1 2024 | % Change (USD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $6,250.1M | $5,628.7M | 11% | $11,996.5M | $10,753.2M | 12% | | Net Income | $112.3M | $84.4M | 33% | $167.6M | $150.5M | 11% | | Diluted EPS | $2.32 | $1.75 | 33% | $3.46 | $3.12 | 11% | | Adjusted Diluted EPS | $3.30 | $2.55 | 29% | $5.60 | $4.33 | 29% | | Adjusted EBITDA | $291.7M | $246.3M | 18% | $516.5M | $433.4M | 19% | | Operating Cash Flow | $332.8M | $273.9M | 22% | $(434.8)M | $(403.6)M | (8)% | - The company doubled its share repurchases in the second quarter and raised the midpoint of its full-year Adjusted EBITDA target range, citing strong year-to-date performance and solid business trends[1] - Investment Management raised $2.9 billion in capital during the first half of 2025, surpassing the total amount raised in the full year of 2024[2] Consolidated Financial Performance Detailed analysis of JLL's Q2 2025 consolidated revenue, profitability, cash flow, and balance sheet Revenue Analysis Consolidated revenue grew 10% in Q2 2025 to $6.3 billion, driven by Real Estate Management and Capital Markets Q2 2025 Revenue by Segment (in millions) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change (LC) | | :--- | :--- | :--- | :--- | | Real Estate Management Services | $4,894.0 | $4,369.9 | 11% | | Leasing Advisory | $676.8 | $642.2 | 5% | | Capital Markets Services | $520.3 | $457.6 | 12% | | Investment Management | $103.1 | $102.6 | (2)% | | Software and Technology Solutions | $55.9 | $56.4 | (1)% | | Total Revenue | $6,250.1 | $5,628.7 | 10% | - Resilient revenues grew 11% in Q2, led by Project Management (+22%) and Workplace Management (+10%)[5] - Transactional revenues increased by 7% in Q2, primarily driven by a 14% rise in Investment Sales and Debt/Equity Advisory within Capital Markets Services[5] Profitability Analysis Net income increased 32% to $112.3 million and Adjusted EBITDA rose 17% in Q2 2025, reflecting growth and cost discipline Q2 2025 Profitability Metrics (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (LC) | | :--- | :--- | :--- | :--- | | Net Income | $112.3 | $84.4 | 32% | | Adjusted Net Income | $159.4 | $123.2 | 29% | | Adjusted EBITDA | $291.7 | $246.3 | 17% | - Key factors widening the gap between GAAP Net Income and non-GAAP measures in Q2 2025 included: - Higher equity losses of $28.7 million (vs. $16.3 million in 2024) - Increased restructuring and acquisition charges of $9.8 million year-over-year[12] Cash Flow and Capital Allocation Operating cash flow increased 22% to $332.8 million, with share repurchases more than doubling in Q2 2025 Cash Flow Summary (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (USD) | | :--- | :--- | :--- | :--- | | Cash flows from operating activities | $332.8 | $273.9 | 22% | | Free Cash Flow | $288.4 | $235.7 | 22% | Share Repurchase Activity | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Shares Repurchased (thousands) | 176.5 | 103.7 | | Total Paid (in millions) | $41.4 | $20.1 | - As of June 30, 2025, $952.0 million remained authorized for share repurchases[16] Balance Sheet and Liquidity Net Debt decreased to $1.59 billion, Net Leverage Ratio improved to 1.2x, and corporate liquidity exceeded $3.3 billion Key Balance Sheet and Liquidity Metrics | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Net Debt (in millions) | $1,586.7 | $1,754.0 | $1,752.0 | | Net Leverage Ratio | 1.2x | 1.4x | 1.7x | | Corporate Liquidity (in millions) | $3,321.4 | $3,312.4 | $2,449.4 | - The reduction in Net Debt from the previous quarter was driven by positive free cash flow[18] Segment Performance Analysis of JLL's Q2 2025 financial performance across its key business segments Real Estate Management Services Revenue grew 11% to $4.9 billion, with Adjusted EBITDA up 19% driven by Workplace and Project Management Real Estate Management Services Q2 Financials (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (LC) | | :--- | :--- | :--- | :--- | | Revenue | $4,894.0 | $4,369.9 | 11% | | Adjusted EBITDA | $106.6 | $88.6 | 19% | - Revenue growth was driven by new client wins and mandate expansions in Workplace Management, and new or expanded contracts in the U.S. and Asia Pacific for Project Management[23] Leasing Advisory Revenue increased 5% to $676.8 million, with Adjusted EBITDA rising 6% due to strong industrial and office momentum Leasing Advisory Q2 Financials (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (LC) | | :--- | :--- | :--- | :--- | | Revenue | $676.8 | $642.2 | 5% | | Adjusted EBITDA | $120.4 | $112.1 | 6% | - Geographically, leasing revenue growth was most significant in the United States, with notable contributions from France, Australia, and Singapore[29] Capital Markets Services Revenue surged 12% to $520.3 million, with Adjusted EBITDA up 61% fueled by debt advisory and investment sales Capital Markets Services Q2 Financials (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (LC) | | :--- | :--- | :--- | :--- | | Revenue | $520.3 | $457.6 | 12% | | Adjusted EBITDA | $54.7 | $33.8 | 61% | - The residential sector was the most significant contributor to the year-over-year increase, with growth also seen in the office, industrial, and retail sectors. The U.S., Japan, and MENA regions led the revenue growth[33] Investment Management Revenue was flat at $103.1 million, with Adjusted EBITDA declining 32% due to lower advisory fees and a prior-year gain Investment Management Q2 Financials (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (LC) | | :--- | :--- | :--- | :--- | | Revenue | $103.1 | $102.6 | (2)% | | Adjusted EBITDA | $16.3 | $22.7 | (32)% | Assets Under Management (AUM) Roll-Forward (in billions) | AUM Change | Quarter-to-Date | Trailing Twelve Months | | :--- | :--- | :--- | | Beginning Balance | $82.3 | $86.6 | | Acquisitions/Takeovers | $1.3 | $5.8 | | Dispositions/Withdrawals | $(1.3) | $(7.6) | | Ending Balance (June 30, 2025) | $84.9 | $84.9 | Software and Technology Solutions Revenue declined 1% to $55.9 million, but Adjusted EBITDA improved significantly due to a favorable change in carried interest Software and Technology Solutions Q2 Financials (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (LC) | | :--- | :--- | :--- | :--- | | Revenue | $55.9 | $56.4 | (1)% | | Adjusted EBITDA | $(6.3) | $(10.9) | 43% | - The improvement in Adjusted EBITDA was mainly driven by a favorable change in carried interest, which swung from a $2.2 million expense in Q2 2024 to a $2.5 million benefit in Q2 2025[39][42] Financial Statements and Notes Detailed unaudited financial statements and comprehensive non-GAAP reconciliations for the reporting period Unaudited Financial Statements Detailed unaudited financial statements for Q2 2025, including Statements of Operations, Cash Flows, and Balance Sheets - The Consolidated Statements of Operations provide a detailed breakdown of revenues and operating expenses, leading to the net income attributable to common shareholders[47][48] - The Consolidated Balance Sheets show total assets of $17.3 billion and total equity of $7.2 billion as of June 30, 2025[66][67] Non-GAAP Reconciliations and Definitions Definitions and reconciliations of non-GAAP financial measures like Adjusted EBITDA and Free Cash Flow to GAAP equivalents Reconciliation of Net Income to Adjusted EBITDA (Q2 2025, in millions) | Line Item | Amount | | :--- | :--- | | Net income attributable to common shareholders | $112.3 | | Add: Interest expense, net | $35.3 | | Add: Income tax provision | $26.7 | | Add: Depreciation and amortization | $66.7 | | Add: Restructuring and acquisition charges | $21.3 | | Add: Net non-cash MSR activity | $4.2 | | Add: Equity losses (IM & Tech) | $27.0 | | Other Adjustments | $(1.8) | | Adjusted EBITDA | $291.7 | - The company defines "Resilient" revenue to include services like Workplace Management, Project Management, and Advisory Fees, while "Transactional" revenue includes Leasing Advisory and Investment Sales[88][90] - Definitions and reconciliations are provided for key metrics including Net Debt, Net Leverage Ratio, and Free Cash Flow[93][95] Appendix: Additional Segment Detail Granular financial breakdowns for each business segment, detailing revenue and Adjusted EBITDA for sub-segments - Provides detailed financial breakdowns for sub-segments such as Workplace Management, Project Management, and Property Management within the Real Estate Management Services segment[97][100] - Includes specific revenue figures for Investment Sales, Debt/Equity Advisory, Value and Risk Advisory, and Loan Servicing within the Capital Markets Services segment[97][100]