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

Part I. Financial Information This section encompasses the unaudited consolidated financial statements and management's analysis of financial condition and results of operations Item 1. Consolidated Financial Statements This section presents the unaudited consolidated financial statements, including balance sheets, income, equity, and cash flow statements, with detailed explanatory notes Consolidated Balance Sheets Presents the company's financial position at June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Assets | $17,340.5 | $16,763.8 | | Total Liabilities | $10,178.9 | $9,868.7 | | Total Equity | $7,161.6 | $6,895.1 | - Total assets increased by $576.7 million from December 31, 2024, to June 30, 2025, primarily driven by increases in warehouse receivables and goodwill[6] - Total liabilities increased by $310.2 million, with commercial paper and credit facility borrowings showing significant increases[6] Consolidated Statements of Comprehensive Income Details the company's financial performance for the three and six months ended June 30, 2025, and 2024, including revenue, operating income, and net income | Metric (Millions USD, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $6,250.1 | $5,628.7 | $11,996.5 | $10,753.2 | | Operating Income | $197.4 | $152.4 | $317.4 | $266.6 | | Net Income | $110.5 | $84.5 | $168.0 | $150.1 | | Net Income Attributable to Common Shareholders | $112.3 | $84.4 | $167.6 | $150.5 | | Basic EPS | $2.36 | $1.77 | $3.53 | $3.17 | | Diluted EPS | $2.32 | $1.75 | $3.46 | $3.12 | - Revenue increased by 11% for the three months ended June 30, 2025, and 12% for the six months ended June 30, 2025, compared to the prior-year periods[8] - Operating income grew by 30% for the quarter and 19% for the six-month period year-over-year[8] Consolidated Statements of Changes in Equity Outlines changes in the company's equity components, including retained earnings and accumulated other comprehensive income, for the periods ended June 30, 2025, and December 31, 2024 | Metric (Millions USD) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Total Equity | $6,895.1 | $7,161.6 | | Retained Earnings | $6,334.9 | $6,494.7 | | Treasury Stock | $(937.9) | $(958.5) | | AOCI | $(646.9) | $(524.2) | - Total equity increased by $266.5 million from December 31, 2024, to June 30, 2025, primarily due to net income and foreign currency translation adjustments, partially offset by common stock repurchases[13] - Accumulated other comprehensive loss (AOCI) improved from $(646.9) million to $(524.2) million, largely due to positive foreign currency translation adjustments[13] Consolidated Statements of Cash Flows Presents the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 | Cash Flow Activity (Millions USD) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(434.8) | $(403.6) | | Net cash used in investing activities | $(200.4) | $(154.1) | | Net cash provided by financing activities | $617.5 | $566.6 | | Net change in cash, cash equivalents and restricted cash | $17.8 | $(5.8) | - Operating activities used more cash in the first six months of 2025 ($434.8 million) compared to 2024 ($403.6 million), mainly due to higher commission payments and timing of reimbursables[17][190] - Investing activities used more cash, increasing from $154.1 million in 2024 to $200.4 million in 2025, primarily due to a $100 million contribution to JLL Income Property Trust[17][191] Notes to Consolidated Financial Statements Provides detailed explanations and disclosures supporting the consolidated financial statements, covering accounting policies, segment information, and other financial details Note 1. Interim Information Clarifies the nature of the unaudited interim financial statements and discusses factors affecting their comparability and seasonality - The interim financial statements are unaudited and include only normal recurring adjustments necessary for fair presentation[21] - The company's revenue and profits historically increase from quarter to quarter as the year progresses due to real estate transaction completion focus by year-end, though annuity-based services have lessened this seasonality[22] - Quarterly compensation and benefits expense can fluctuate significantly due to accruals based on annual performance targets[23] Note 2. New Accounting Standards Outlines recently issued accounting standards updates and their potential impact on the company's financial disclosures - ASU 2023-09 (Income Taxes) is effective for annual periods beginning after December 15, 2024, and the company is evaluating its impact on tax disclosures[27] - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for annual periods beginning after December 15, 2026, and will result in expanded expense disclosures but no impact on financial statements or results of operations[28] Note 3. Revenue Recognition Details the company's policies for recognizing revenue, including exclusions from ASC Topic 606 and contract balances - Mortgage banking and servicing operations revenue (Loan Servicing, MSRs, loan origination fees) are excluded from ASC Topic 606[29] Revenue Excluded from ASC Topic 606 | Metric (Millions USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue excluded from ASC Topic 606 | $82.5 | $67.6 | $152.9 | $134.8 | Contract Balances | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Contract assets, net | $368.0 | $384.4 | | Contract liabilities | $178.8 | $154.7 | Note 4. Business Segments Describes the company's global business segments, recent reclassifications, and the non-GAAP measure used for segment performance evaluation - Effective January 1, 2025, Property Management was reclassified from Leasing Advisory to Real Estate Management Services, and several segments were renamed[34] - The company operates five global business segments: Real Estate Management Services, Leasing Advisory, Capital Markets Services, Investment Management, and Software and Technology Solutions[35][40] - Segment results are evaluated based on Adjusted EBITDA, which excludes various non-operating and non-cash items to assess core performance[37][139] Note 5. Business Combinations, Goodwill and Other Intangible Assets Reports on business acquisitions, earn-out liabilities, and changes in goodwill, including the impact of exchange rate movements and impairment testing - During the six months ended June 30, 2025, the company paid $18.7 million for business acquisitions, including $12.6 million for deferred obligations from prior years[48] Earn-out Payments and Liabilities | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Maximum earn-out payments (undiscounted) | $78.2 | $108.0 | | Short-term earn-out liabilities (fair value) | $5.2 | $12.0 | | Long-term earn-out liabilities (fair value) | $13.9 | $23.8 | Goodwill | Goodwill (Millions USD) | Balance as of January 1, 2025 | Additions, net of adjustments | Impact of exchange rate movements | Balance as of June 30, 2025 | | :---------------------- | :---------------------------- | :---------------------------- | :-------------------------------- | :-------------------------- | | Consolidated | $4,611.3 | $6.6 | $97.9 | $4,715.8 | - Goodwill increased by $104.5 million from January 1, 2025, to June 30, 2025, primarily due to exchange rate movements[55] - The company reassessed its reporting units and tested goodwill for impairment as of January 1, 2025, due to organizational structure changes, concluding no impairment existed[52][53] Note 6. Investments Provides a breakdown of the company's investments by type and reports on changes in total investment value and impairment charges Investment Types | Investment Type (Millions USD) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Investment Management co-investments | $508.7 | $406.1 | | Software and Technology Solutions investments | $334.7 | $372.8 | | Other investments | $35.4 | $33.8 | | Total | $878.8 | $812.7 | - Total investments increased to $878.8 million as of June 30, 2025, from $812.7 million at December 31, 2024[60] - The company recognized an investment-level impairment charge of $2.2 million during the six months ended June 30, 2025[62] Note 7. Fair Value Measurements Details the fair value of various financial instruments, including long-term debt, investments, and derivatives, as of June 30, 2025, and December 31, 2024 - The fair value of long-term debt was $838.0 million as of June 30, 2025, compared to its carrying value of $805.3 million[68] - Investments at fair value using Net Asset Value (NAV) were $495.1 million as of June 30, 2025, an increase from $367.9 million at December 31, 2024[70] Fair Value Assets | Fair Value Assets (Millions USD) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Investments - fair value | $338.6 | $374.1 | | Foreign currency forward contracts receivable | $6.3 | $4.9 | | Warehouse receivables | $1,228.6 | $770.7 | | Deferred compensation plan assets | $674.9 | $664.0 | | Mortgage banking derivative assets | $54.2 | $161.1 | | Total assets at fair value | $2,302.6 | $1,974.8 | Fair Value Liabilities | Fair Value Liabilities (Millions USD) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Foreign currency forward contracts payable | $8.5 | $13.9 | | Deferred compensation plan liabilities | $658.5 | $658.4 | | Earn-out liabilities | $19.1 | $35.8 | | Mortgage banking derivative liabilities | $34.3 | $67.3 | | Total liabilities at fair value | $720.4 | $775.4 | Note 8. Debt Provides an overview of the company's debt structure, including short-term and long-term borrowings, credit facilities, and warehouse facilities Debt Summary | Debt (Millions USD) | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Total short-term debt, net | $796.4 | $353.1 | | Credit facility, net | $370.0 | $88.6 | | Long-term senior notes | $805.3 | $756.7 | | Total debt, net | $1,971.7 | $1,198.4 | - Total debt, net of debt issuance costs, increased significantly to $1,971.7 million as of June 30, 2025, from $1,198.4 million at December 31, 2024, driven by increased commercial paper and credit facility utilization[91] - The company maintains a $2.5 billion commercial paper program and a $3.3 billion unsecured revolving credit facility, with average outstanding borrowings of $1,290.0 million and an average effective interest rate of 5.0% for the six months ended June 30, 2025[92][93][96] - Warehouse facilities capacity increased to $3,800.0 million as of June 30, 2025, from $3,200.0 million at December 31, 2024, with outstanding balances of $1,223.7 million[102] Note 9. Commitments and Contingencies Discusses the company's involvement in legal proceedings, professional indemnity accruals, and loan loss guarantee reserves for DUS program arrangements - The company is involved in various litigation matters but believes their ultimate resolution will not materially adversely affect its financial position[103][216] - Professional indemnity accrual increased to $5.0 million as of June 30, 2025, from $4.2 million at December 31, 2024, due to new claims[106] - Loans subject to DUS program loss-sharing arrangements had an aggregate unpaid principal balance of $24.0 billion as of June 30, 2025, with a loan loss guarantee reserve of $24.1 million[107][109] Note 10. Restructuring and Acquisition Charges Reports on the nature and amount of restructuring and acquisition-related charges, including severance and earn-out adjustments, for the periods presented Restructuring and Acquisition Charges | Charge Type (Millions USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Severance and other employment-related charges | $18.0 | $7.2 | $25.4 | $11.7 | | Restructuring, pre-acquisition and post-acquisition charges | $10.0 | $6.1 | $17.7 | $13.5 | | Stock-based compensation expense for post-acquisition retention awards | $0.7 | $0.3 | $1.4 | $0.6 | | Fair value adjustments to earn-out liabilities | $(7.4) | $(2.1) | $(3.5) | $(12.6) | | Total Restructuring and acquisition charges | $21.3 | $11.5 | $41.0 | $13.2 | - Restructuring and acquisition charges significantly increased to $21.3 million for Q2 2025 (from $11.5 million in Q2 2024) and $41.0 million for YTD 2025 (from $13.2 million in YTD 2024), primarily due to higher severance and employment-related charges[111][153] Note 11. Accumulated Other Comprehensive Income (Loss) By Component Breaks down the components of accumulated other comprehensive income (loss), highlighting the impact of foreign currency translation adjustments AOCI Components | AOCI Component (Millions USD) | Balance as of December 31, 2024 | Balance as of June 30, 2025 | | :---------------------------- | :------------------------------ | :-------------------------- | | Pension and postretirement benefit | $(55.5) | $(56.0) | | Cumulative foreign currency translation adjustment | $(591.4) | $(468.2) | | Total AOCI | $(646.9) | $(524.2) | - Total Accumulated Other Comprehensive Loss (AOCI) improved from $(646.9) million at December 31, 2024, to $(524.2) million at June 30, 2025, primarily driven by positive foreign currency translation adjustments[114] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section offers management's insights into the company's financial condition, operating results, critical accounting policies, and liquidity and capital resources Summary of Critical Accounting Policies and Estimates Confirms that no material changes were made to the company's critical accounting policies and estimates during the reporting period - No material changes to critical accounting policies and estimates were made during the six months ended June 30, 2025[119] Items Affecting Comparability Discusses macroeconomic trends, geopolitical factors, and business specific events that influence the comparability of financial results - Results are significantly influenced by macroeconomic trends, geopolitical environment, global and regional real estate markets, and financial and credit markets[120] - The timing of acquisitions and dispositions, transaction-based revenues, equity earnings, and foreign currency fluctuations can impact year-over-year comparability[122][123][124][126] - The business experiences seasonality, with lower revenue and profit typically in the first quarter, increasing throughout the year, though annuity-based services have somewhat mitigated this[127] Results of Operations Analyzes the company's consolidated and segment-specific operating performance, including revenue, expenses, and profitability metrics Consolidated Operating Results Presents a summary of the company's overall financial performance, highlighting revenue, operating income, and Adjusted EBITDA trends | Metric (Millions USD) | Q2 2025 (USD) | Q2 2024 (USD) | Q2 % Change (Local Currency) | YTD 2025 (USD) | YTD 2024 (USD) | YTD % Change (Local Currency) | | :-------------------- | :------------ | :------------ | :--------------------------- | :------------- | :------------- | :---------------------------- | | Revenue | $6,250.1 | $5,628.7 | 10% | $11,996.5 | $10,753.2 | 12% | | Operating Income | $197.4 | $152.4 | 28% | $317.4 | $266.6 | 18% | | Adjusted EBITDA | $291.7 | $246.3 | 17% | $516.5 | $433.4 | 19% | - Consolidated revenue increased by 10% in local currency for Q2 2025 and 12% for YTD 2025, driven by strong performance in Real Estate Management Services and Capital Markets Services[130][132][147][148] - Adjusted EBITDA grew by 17% in local currency for Q2 2025 and 19% for YTD 2025, reflecting top-line growth and cost discipline[130][132][161] Non-GAAP Financial Measures Explains the company's use of non-GAAP measures like Adjusted EBITDA and local currency changes to provide a clearer view of core operating performance - Management uses Adjusted EBITDA and local currency percentage changes as non-GAAP measures to assess core operating performance and enhance comparability[133][139] - Adjustments to GAAP measures include excluding net non-cash MSR and mortgage banking derivative activity, restructuring and acquisition charges, and equity earnings/losses from certain segments[134][135][136][137][138][141] Adjusted EBITDA Reconciliation | Reconciliation Item (Millions USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------- | :------ | :------ | :------- | :------- | | Net income attributable to common shareholders | $112.3 | $84.4 | $167.6 | $150.5 | | Add: Interest expense, net | $35.3 | $41.7 | $59.9 | $72.2 | | Add: Income tax provision | $26.7 | $20.5 | $40.7 | $36.4 | | Add: Depreciation and amortization | $66.7 | $61.4 | $137.4 | $121.4 | | Adjustments: Restructuring and acquisition charges | $21.3 | $11.5 | $41.0 | $13.2 | | Adjustments: Net non-cash MSR and mortgage banking derivative activity | $4.2 | $11.8 | $17.1 | $20.8 | | Adjustments: Interest on employee loans, net of forgiveness | $(2.0) | $(1.3) | $(3.6) | $(2.3) | | Adjustments: Equity losses - Investment Management and Software and Technology Solutions | $27.0 | $16.3 | $55.7 | $21.2 | | Adjustments: Credit losses on convertible note investments | $0.2 | — | $0.7 | — | | Adjusted EBITDA | $291.7 | $246.3 | $516.5 | $433.4 | Revenue Analyzes the consolidated revenue performance, distinguishing between resilient and transactional revenue streams and their growth rates - Consolidated revenue increased 10% in local currency for Q2 2025 and 12% for YTD 2025[147][148] - Resilient revenues (Workplace Management, Project Management, Property Management, Value and Risk Advisory, Loan Servicing, Advisory Fees, Software and Technology Solutions) collectively grew 11% in Q2 and 12% YTD[131][147][148] - Transactional revenues (Portfolio Services and Other, Leasing Advisory, Investment Sales, Debt/Equity Advisory and Other, Incentive fees and Transaction fees and other) increased 7% in Q2 and 10% YTD[131][147][148] Operating Expenses Examines the trends in consolidated operating expenses, including gross contract costs, platform expenses, and restructuring charges - Consolidated operating expenses increased 10% to $6.1 billion for Q2 2025[152] - Gross contract costs rose 11% to $4.2 billion in Q2, driven by growth in businesses with higher client pass-through expenses like Workplace Management and Project Management[152] - Platform operating expenses increased 6% to $1.8 billion in Q2, largely due to revenue-related expense growth[152] - Restructuring and acquisition charges increased significantly in Q2 and YTD 2025 due to higher severance and employment-related charges and changes in non-cash charges/benefits from earn-outs[153][154] Interest Expense Analyzes the net interest expense, highlighting the factors contributing to its changes for the reported periods Interest Expense, Net | Metric (Millions USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest expense, net | $35.3 | $41.7 | $59.9 | $72.2 | - Net interest expense decreased for both the three and six months ended June 30, 2025, primarily due to a lower effective interest rate and lower average borrowings compared to prior-year periods[155] Equity Earnings/Losses Reports on the company's equity earnings and losses, particularly noting the impact of valuation declines in Software and Technology Solutions investments Total Equity Losses by Segment | Segment (Millions USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Investment Management | $(1.3) | $(7.3) | $(7.4) | $(11.2) | | Software and Technology Solutions | $(27.4) | $(9.0) | $(48.9) | $(10.0) | | Other | $1.3 | $0.9 | $3.3 | $2.1 | | Total Equity losses | $(27.4) | $(15.4) | $(53.0) | $(19.1) | - Equity losses increased significantly for both the quarter and six-month period, largely attributable to valuation declines of investments within Software and Technology Solutions[156][157] Income Taxes Details the income tax provision and effective tax rate, noting the consistent rate and the ongoing assessment of new tax legislation Income Tax Provision and Effective Tax Rate | Metric (Millions USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax provision | $26.7 | $20.5 | $40.7 | $36.4 | | Effective Tax Rate (ETR) | 19.5% | 19.5% | 19.5% | 19.5% | - The effective tax rate remained consistent at 19.5% for both the three and six months ended June 30, 2025 and 2024[158] - The recently enacted One Big Beautiful Bill Act (OBBBA) in July 2025, which alters tax deductions and international earnings taxation, is currently being assessed for its impact on future financial statements[159] Net Income and Adjusted EBITDA Summarizes the company's net income attributable to common shareholders and Adjusted EBITDA, highlighting the drivers of their growth Net Income and Adjusted EBITDA Summary | Metric (Millions USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to common shareholders | $112.3 | $84.4 | $167.6 | $150.5 | | Adjusted EBITDA | $291.7 | $246.3 | $516.5 | $433.4 | - Net income attributable to common shareholders increased by 33% for Q2 2025 and 11% for YTD 2025[161] - Adjusted EBITDA increased by 18% for Q2 2025 and 19% for YTD 2025, driven by resilient revenue growth, transactional revenue growth in Capital Markets Services, enhanced platform leverage, and cost discipline[161] Segment Operating Results Provides a detailed breakdown of revenue and Adjusted EBITDA performance for each of the company's global business segments Real Estate Management Services Analyzes the revenue and Adjusted EBITDA performance of the Real Estate Management Services segment, driven by Workplace and Project Management | Metric (Millions USD) | Q2 2025 (USD) | Q2 2024 (USD) | Q2 % Change (Local Currency) | YTD 2025 (USD) | YTD 2024 (USD) | YTD % Change (Local Currency) | | :-------------------- | :------------ | :------------ | :--------------------------- | :------------- | :------------- | :---------------------------- | | Revenue | $4,894.0 | $4,369.9 | 11% | $9,463.4 | $8,439.1 | 12% | | Adjusted EBITDA | $106.6 | $88.6 | 19% | $172.9 | $160.0 | 7% | - Revenue growth was primarily driven by strong performance in Workplace Management (up 10% in Q2, 13% YTD) and Project Management (up 22% in Q2, 19% YTD), with client wins and mandate expansions[169] - Adjusted EBITDA increased due to top-line performance and continued cost discipline, despite headwinds from prior-year incentive compensation accruals timing[170][171] Leasing Advisory Examines the revenue and Adjusted EBITDA trends for the Leasing Advisory segment, noting growth across major asset classes and improved cost efficiency | Metric (Millions USD) | Q2 2025 (USD) | Q2 2024 (USD) | Q2 % Change (Local Currency) | YTD 2025 (USD) | YTD 2024 (USD) | YTD % Change (Local Currency) | | :-------------------- | :------------ | :------------ | :--------------------------- | :------------- | :------------- | :---------------------------- | | Revenue | $676.8 | $642.2 | 5% | $1,262.9 | $1,162.6 | 9% | | Adjusted EBITDA | $120.4 | $112.1 | 6% | $217.4 | $186.9 | 15% | - Leasing revenue grew across major asset classes, particularly in industrial and office, with significant contributions from the U.S., France, Australia, and Singapore for the quarter[173] - Adjusted EBITDA increases were driven by revenue growth, with compensation and benefits as a percentage of revenue improving year-over-year due to increased use of technology and shared service centers[175] Capital Markets Services Reports on the revenue and Adjusted EBITDA growth in Capital Markets Services, primarily fueled by debt advisory and investment sales | Metric (Millions USD) | Q2 2025 (USD) | Q2 2024 (USD) | Q2 % Change (Local Currency) | YTD 2025 (USD) | YTD 2024 (USD) | YTD % Change (Local Currency) | | :-------------------- | :------------ | :------------ | :--------------------------- | :------------- | :------------- | :---------------------------- | | Revenue | $520.3 | $457.6 | 12% | $955.6 | $835.2 | 14% | | Adjusted EBITDA | $54.7 | $33.8 | 61% | $103.3 | $58.8 | 73% | - Top-line growth was fueled by debt advisory and investment sales, with the residential sector making the most significant contribution to the year-over-year increase[177] - Adjusted EBITDA improvements were primarily due to revenue growth and the net impact of year-over-year loan-related losses, with compensation and benefits expense as a percentage of revenue modestly improving[179] Investment Management Analyzes the revenue and Adjusted EBITDA performance of the Investment Management segment, noting declines due to lower assets under management and specific prior-year gains | Metric (Millions USD) | Q2 2025 (USD) | Q2 2024 (USD) | Q2 % Change (Local Currency) | YTD 2025 (USD) | YTD 2024 (USD) | YTD % Change (Local Currency) | | :-------------------- | :------------ | :------------ | :--------------------------- | :------------- | :------------- | :---------------------------- | | Revenue | $103.1 | $102.6 | (2)% | $201.6 | $206.0 | (3)% | | Adjusted EBITDA | $16.3 | $22.7 | (32)% | $32.1 | $43.7 | (28)% | | Assets Under Management (AUM) | $84.9 (June 30, 2025) | $86.6 (June 30, 2024) | -2% (trailing 12 months) | $84.9 (June 30, 2025) | $86.6 (June 30, 2024) | -2% (trailing 12 months) | - Advisory fees saw a slight decline due to lower assets under management (AUM), reflecting asset dispositions in Q4 2024[183] - Adjusted EBITDA decreased significantly, largely due to the absence of an $8.2 million gain recognized in the prior-year quarter from purchasing a controlling interest in a managed fund[183] Software and Technology Solutions Reports on the revenue and Adjusted EBITDA trends for Software and Technology Solutions, highlighting the impact of client technology spend and carried interest expense | Metric (Millions USD) | Q2 2025 (USD) | Q2 2024 (USD) | Q2 % Change (Local Currency) | YTD 2025 (USD) | YTD 2024 (USD) | YTD % Change (Local Currency) | | :-------------------- | :------------ | :------------ | :--------------------------- | :------------- | :------------- | :---------------------------- | | Revenue | $55.9 | $56.4 | (1)% | $113.0 | $110.3 | 3% | | Adjusted EBITDA | $(6.3) | $(10.9) | 43% | $(9.2) | $(16.0) | 41% | - Q2 revenue declined due to reduced technology spend from large existing clients, partially offset by low double-digit growth in software services. YTD revenue grew due to increased software bookings[186] - Adjusted EBITDA improved significantly for both the quarter and year-to-date, primarily attributable to a favorable change in carried interest expense/benefit, which offset increases in other operating expenses[187][188] Liquidity and Capital Resources Assesses the company's cash flows from operating, investing, and financing activities, and details share repurchase activities - Operating activities used $434.8 million of cash in the first six months of 2025, an increase from $403.6 million in 2024, primarily due to higher commission payments and timing of reimbursables[190] - Investing activities used $200.4 million of cash, up from $154.1 million in 2024, mainly due to a $100 million contribution to JLL Income Property Trust[191] - Financing activities provided $617.5 million of cash, up from $566.6 million in 2024, driven by increased borrowings to support the JLL IPT investment and higher share repurchases[192] - The company repurchased 251,800 shares for $61.2 million during the first six months of 2025, with $952.0 million remaining authorized under the share repurchase program[204] Cautionary Note Regarding Forward-Looking Statements Advises readers that the report contains forward-looking statements subject to risks and uncertainties, and should not be unduly relied upon - The report contains forward-looking statements, which involve known and unknown risks and uncertainties that may cause actual results to differ materially from expectations[206] - Readers are cautioned not to place undue reliance on these statements, as they speak only as of the date they were made[207] Item 3. Quantitative and Qualitative Disclosures about Market Risk Discusses the company's exposure to interest rate and foreign exchange risks and the proportion of revenue affected by currency fluctuations - A 50 basis point increase in short-term interest rates would result in an incremental $3.2 million of interest expense for the six months ended June 30, 2025[209] Revenue Exposure to Foreign Exchange Rates | Currency | Six Months Ended June 30, 2025 (% of total revenue) | Six Months Ended June 30, 2024 (% of total revenue) | | :------------------- | :-------------------------------------------------- | :-------------------------------------------------- | | British pound | 7% | 8% | | Euro | 6% | 6% | | Australian dollar | 5% | 5% | | Other | 19% | 20% | | Revenue exposed to foreign exchange rates | 37% | 39% | | United States dollar | 63% | 61% | | Total revenue | 100% | 100% | - Approximately 37% of total revenue for the six months ended June 30, 2025, was exposed to foreign exchange rates, with the British pound, Euro, and Australian dollar being significant functional currencies[211] Item 4. Controls and Procedures Confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes to internal control over financial reporting - The company's disclosure controls and procedures were effective as of June 30, 2025[215] - There were no changes in the company's internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[215] Part II. Other Information This section provides additional information including legal proceedings, risk factors, equity security sales, and other disclosures Item 1. Legal Proceedings States that the company is involved in various legal matters but anticipates no material adverse effect on its financial position from their ultimate resolution - The company is a defendant or plaintiff in various litigation matters, some involving substantial damage claims, but believes the ultimate resolution will not materially impact its financial position[216] Item 1A. Risk Factors Confirms that no material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[217] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details the company's common stock repurchases during the second quarter of 2025 and the remaining authorization under its repurchase program Common Stock Repurchases | Period | Total number of shares purchased | Weighted average price paid per share | | :------------------------- | :------------------------------- | :------------------------------------ | | April 1, 2025 - April 30, 2025 | 38,198 | $219.90 | | May 1, 2025 - May 31, 2025 | 37,678 | $228.44 | | June 1, 2025 - June 30, 2025 | 100,669 | $242.48 | | Total | 176,545 | | - As of June 30, 2025, $952.0 million remained authorized for repurchases under the company's share repurchase program[219][204] Item 5. Other Information Confirms that no directors or officers adopted or terminated any Rule 10b5-1(c) or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated any Rule 10b5-1(c) or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[220] Item 6. Exhibits Lists all exhibits filed with the Form 10-Q, including legal agreements, certifications, and XBRL-related documents - Exhibits include a Letter Agreement, CEO and CFO certifications under Sarbanes-Oxley Act, and Inline XBRL documents[221] Signature Provides the official signing details of the report, including the signatory's name, title, and date - The report was signed on August 6, 2025, by Kelly Howe, Chief Financial Officer of Jones Lang LaSalle Incorporated[222][223]