Colliers International Group Q4 Earnings Call Highlights

Core Insights - Colliers International Group reported a strong performance in 2025, with significant growth across its diversified platform and a shift towards recurring professional services, which now account for over 70% of earnings [3][5]. Financial Performance - Fourth-quarter revenue reached $1.6 billion, reflecting a 5% year-over-year increase, with adjusted EBITDA at $245 million, up 6% [2][5]. - Internal revenue growth for the full year was 5%, while the fourth-quarter internal growth was described as "essentially flat" due to challenging comparisons from the previous year [2][5]. Segment Performance - The Engineering segment saw an 8% net revenue growth in Q4, primarily driven by acquisitions, although there was a temporary slowdown in certain project management operations [5][6]. - Investment Management net revenue increased by 6%, with a net margin of 42.5%, although margins are expected to face pressure during the integration of operations [6][12]. Acquisition Strategy - Colliers announced the acquisition of Ayesa Engineering for approximately $700 million, which is expected to enhance growth avenues and position Colliers among the top 30 global engineering firms [5][7][8]. - The acquisition will be financed through the company's revolving credit facility, with a borrowing rate of about 4% [8]. Growth Outlook - For 2026, Colliers anticipates "mid-teens" growth driven by internal gains, acquisitions, and a recovery in Capital Markets, with total Engineering growth projected to exceed 25% [4][15]. - The company expects to raise $6–9 billion in Investment Management for 2026, supported by several funds in the market [12][14]. Market Dynamics - Management highlighted that the U.S. represents about 50% of Colliers' Capital Markets business, with expectations for high teens growth in Capital Markets and mid- to high-single digits in Leasing [15][17]. - The engineering business is characterized by a strong demand for design work and project management, with a noted shortage of qualified engineers supporting pricing [10][11]. Technology and Capital Allocation - Colliers views AI as a productivity and growth enabler, aiming to enhance efficiency and insights without replacing essential services [18]. - The company is prioritizing capital for growth opportunities, including the Ayesa acquisition, rather than stock buybacks [19].