Key Takeaways JLL shares rose 28.1% in three months compared with the industry's 12% gain.Workplace and Project Management drove revenue growth in Q2 2025.JLL raised 2025 adjusted EBITDA guidance to $1.30-$1.45 billion.Shares of Jones Lang LaSalle Incorporated (JLL) , popularly known as JLL, have gained 28.1% in the past three months, outperforming the industry’s upside of 12%.JLL is expected to gain more from the continued strength of its resilient lines of business and favorable outsourcing trends. Its d ...

Financial Data and Key Metrics Changes - The company reported adjusted net income of $0.28 per share, distributable earnings of $0.43 per share, and adjusted EBITDA of $20.1 million, all in line with expectations [4][11] - Recurring service revenues were approximately $44 million, a sequential decrease of about $1.5 million, primarily due to lower property management fees at RMR Residential [11] - The company expects service revenues to increase to approximately $45 million next quarter based on favorable trends in managed REITs [11] Business Line Data and Key Metrics Changes - The Managed REITs have seen share price improvements, particularly for DHC and ILPT, which have increased substantially year to date [4] - The private capital business totals over $12 billion, with a focus on retail, residential, credit, and select development opportunities [4] - The retail sector is accumulating a portfolio of value-add multi-tenant retail assets valued at approximately $100 million, with a recent investment of $21 million in a community shopping center [5] Market Data and Key Metrics Changes - DHC's same property cash basis NOI increased by 18.5% year over year, driven by strong sector fundamentals [8] - SVC's RevPAR increased by 40 basis points year over year, outperforming the industry by 90 basis points despite renovation-related revenue displacement [9] - ILPT refinanced $1.2 billion of floating rate debt with new fixed-rate debt at a weighted average interest rate of 6.4% [9] Company Strategy and Development Direction - The company is focused on strategic initiatives for Managed REITs and private capital business, including deleveraging actions through asset sales and refinancings [4] - The residential sector is expected to benefit from decelerating supply growth and favorable migration trends, targeting mid to high teen returns [6] - The company aims to grow private capital AUM over the long term, with recent hiring of a Senior Vice President to enhance capital formation efforts [7] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing economic uncertainty but remains focused on strategic initiatives [4] - The fundraising environment for private capital is challenging but showing signs of improvement, with expectations of continued ramp-up in the next six months [20] - The company anticipates adjusted EBITDA of approximately $20.5 million and distributable earnings between $0.44 and $0.46 per share for the next quarter [15] Other Important Information - The company expects to end the fiscal year with approximately $60 million in cash and no borrowings on its $100 million line of credit [15] - The dividend is funded through two sources: ARMOUR LLC and RMR Inc, with a coverage ratio of 74% from the operating business [45] Q&A Session Summary Question: What is the outlook for the fundraising environment on the private capital side? - Management acknowledged that while the fundraising environment remains challenging, it is improving, with increased meetings with potential capital providers [18][20] Question: Can you elaborate on the RMR Residential Enhanced Growth Venture? - The venture will include five assets, with a total equity investment of just under $100 million, aimed at attracting committed capital from investors [22][24] Question: What is the expected size of the fundraising on the residential side? - The goal is to raise about $300 million of equity for the residential venture, seeded with just under $100 million of assets [29] Question: How does the company view the performance of RMR Residential? - The current run rate is expected to remain steady until the fundraising environment normalizes, with AUM currently at about $4.6 billion [35][55] Question: What is the rationale behind the dividend coverage? - The dividend is funded through operating business contributions and cash reserves, with a focus on maintaining coverage as the business grows [45][47]

Financial Performance - JLL's Q2 2025 revenue increased by 11% in USD (10% in local currency) to $6250 million compared to $5629 million in Q2 2024[29] - Adjusted EBITDA for Q2 2025 was $292 million, an 18% increase in USD (17% in local currency) compared to $246 million in Q2 2024[29] - Adjusted Net Income for Q2 2025 rose by 29% in both USD and local currency to $159 million, compared to $123 million in Q2 2024[29] - Adjusted Diluted EPS also increased by 29% to $330 in Q2 2025, up from $255 in Q2 2024[29] - Year-to-date 2025 revenue reached $11997 million, a 12% increase in both USD and local currency compared to $10753 million in the first six months of 2024[33] - The company is targeting an Adjusted EBITDA of $1300-$1450 million for 2025[68] Business Segment Performance - Real Estate Management Services revenue grew by 11% in local currency, reaching $4894 million in Q2 2025[35, 38] - Capital Markets Services revenue increased by 12% in local currency to $520 million in Q2 2025[35, 47] - Leasing Advisory revenue grew by 5% in local currency to $677 million in Q2 2025[35, 43] Capital Markets and Investment Trends - Global direct investment growth moderated to 13% in local currency (14% in USD) in Q2 2025[10] - Share repurchases totaled $41 million in Q2 2025, bringing the year-to-date total to $61 million[64]

Financial Data and Key Metrics Changes - The company reported double-digit revenue gains across both resilient and transactional businesses, with a 28% growth in adjusted EPS [6][7] - Adjusted EBITDA margin improved due to higher transactional revenues and operating efficiency [24][28] Business Line Data and Key Metrics Changes - Real Estate Management Services saw revenue growth led by Workplace Management, with nearly 30% increase on a two-year stacked basis [16] - Leasing Advisory experienced broad-based revenue growth, with an 18% increase in office leasing and a 14% increase in industrial leasing [19] - Capital Markets Services reported over 45% growth in debt advisory and 15% growth in investment sales [22] Market Data and Key Metrics Changes - U.S. office leasing increased for the fifth consecutive quarter, exceeding first quarter 2019 levels, although large transactions remain approximately 30% below pre-pandemic averages [20][58] - The industrial market showed a 14% revenue growth in the U.S., despite a 20% decline in overall market volume [61] Company Strategy and Development Direction - The company is focused on profitable and sustainable growth, investing in technology and people to enhance service delivery [8][30] - There is a strategic shift towards globalizing the Property Management business and capitalizing on outsourcing trends [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted that while the current economic climate presents challenges, the company remains confident in its strategy and long-term growth drivers [8][33] - The company is maintaining its full-year adjusted EBITDA target range of $1,250 million to $1,450 million, reflecting resilience in its operations [30][31] Other Important Information - The company has a strong liquidity position with $3.3 billion in total liquidity and a net leverage ratio of 1.4 times, down from 1.9 times a year earlier [29] - Leadership changes were announced, with Karen taking on a new role as CEO of Leasing Advisory and Kelly Howe succeeding her as CFO [12][13] Q&A Session Summary Question: How does the company underwrite long-term political risk? - Management acknowledged increased uncertainty and decreased visibility but emphasized the need for GDP growth, which correlates with their operations [36][38] Question: Will macro uncertainty affect real estate outsourcing? - Management indicated that companies may still seek to outsource for cost-cutting, but decision-making may slow due to lack of visibility [39][41] Question: What are the growth expectations for Real Estate Management Services? - Management expects high single-digit to low double-digit growth, with some downward pressure in the current year due to evolving property management integration [47][50] Question: How is the company addressing capital raising and asset management? - Management noted a significant increase in capital raised in Q1 2025 compared to the previous year, with expectations for continued investment opportunities [54] Question: Are there geographic trends in the office market? - Management observed strong performance in the West Coast and mixed results in gateway cities, with secondary markets improving [83] Question: How is hiring being managed in the current environment? - Management stated that hiring plans are tailored to market conditions, with a cautious approach in uncertain times [86]

Core Insights - Jones Lang LaSalle Incorporated (JLL) reported a 13% year-over-year increase in revenue for Q1 2025, reaching $5.746 billion, with both Resilient and Transactional revenues achieving double-digit growth [1][4][7] - Adjusted diluted earnings per share increased by 28% to $2.31, while diluted earnings per share decreased by 19% to $1.14 due to non-cash losses [1][6] - The company emphasized its focus on platform differentiation, efficiency, and resiliency, which contributed to the strong revenue growth despite a volatile market backdrop [2][3] Revenue Performance - Total revenue for Q1 2025 was $5,746.4 million, up from $5,124.5 million in Q1 2024, reflecting a 12% increase in USD and a 13% increase in local currency [3][4] - Resilient revenues grew by 13%, driven by Workplace Management (up 15%) and Project Management (up 16%), while Transactional revenues increased by 14%, led by Leasing Advisory (up 15%) and Capital Markets Services (up 16%) [4][7][21] - Real Estate Management Services revenue rose to $4,569.4 million, a 12% increase from the previous year, with significant contributions from Workplace and Project Management [3][15] Profitability Metrics - Adjusted EBITDA for Q1 2025 was $224.8 million, a 20% increase from $187.1 million in Q1 2024, driven by revenue growth and improved platform leverage [6][8] - Net income attributable to common shareholders was $55.3 million, down 16% from $66.1 million in the prior year, while adjusted net income increased by 30% to $111.6 million [6][9] Cash Flow and Capital Allocation - Cash flows from operating activities were negative at $(767.6) million, a 13% decline from $(677.5) million in Q1 2024, primarily due to timing of net reimbursables and higher commission payments [9][44] - Free cash flow also decreased by 13% to $(812.1) million compared to $(720.7) million in the previous year [9] Segment Performance - Leasing Advisory revenue increased by 13% to $586.1 million, with broad-based growth across asset classes, particularly in the U.S. [20][21] - Capital Markets Services revenue grew by 15% to $435.3 million, with notable performance in debt advisory and investment sales, particularly in the U.S. [23][25] - Investment Management revenue decreased by 5% to $98.5 million, primarily due to lower assets under management [27][28] Debt and Liquidity - Total net debt increased to $1,754.0 million as of March 31, 2025, compared to $800.6 million at the end of 2024, reflecting seasonal compensation payments and a $100 million investment in JLL Income Property Trust [12][13] - Corporate liquidity stood at $3,312.4 million, down from $3,616.3 million at the end of 2024 [12] Organizational Changes - Effective January 1, 2025, JLL implemented changes in its reporting segments to better align with client needs and industry dynamics, including renaming and restructuring certain segments [14]

Company Performance - RMR Group reported quarterly earnings of $0.28 per share, missing the Zacks Consensus Estimate of $0.30 per share, and down from $0.39 per share a year ago, representing an earnings surprise of -6.67% [1] - The company posted revenues of $166.67 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 22.23%, and down from $217.75 million year-over-year [2] - RMR Group has not surpassed consensus EPS or revenue estimates over the last four quarters [2] Stock Performance - RMR Group shares have declined approximately 29.9% since the beginning of the year, compared to a decline of -3.9% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $204.06 million, and for the current fiscal year, it is $1.35 on revenues of $849.39 million [7] Industry Outlook - The Real Estate - Operations industry, to which RMR Group belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact RMR Group's stock performance [5]