Newmark(US:NMRK)2025-10-30 15:00Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $863.5 million, representing a 25.9% increase from $685.9 million in Q3 2024 [8] - Adjusted EPS increased by 27.3% to $0.42 compared to $0.33 [10] - Adjusted EBITDA was $145.2 million, up 28.9% from $112.6 million [10] - Adjusted free cash flow for the trailing twelve months rose by 134% to $291.9 million [11] Business Line Data and Key Metrics Changes - Management Services, servicing, and other revenues increased by 12.6%, with Valuation & Advisory growing by 23.5% [8] - Leasing revenues rose by 13.7%, achieving a record third quarter for this service line [8] - Investment sales volumes increased by 67%, significantly outpacing the industry [9] Market Data and Key Metrics Changes - The company reported a 59.7% increase in revenues from Capital Markets, reflecting a 129% improvement in total debt volumes [9] - The company has opened nine international offices and hired over 100 revenue-generating professionals outside the U.S. since the beginning of last year [6] Company Strategy and Development Direction - The company aims to produce over $2 billion of recurring revenues annually by 2029, supported by organic growth and recent acquisitions [6] - Newmark has launched property and facility management services in India and expanded its international presence in various countries [5][6] - The acquisition of Real Foundations is expected to enhance the company's consulting and technology advisory capabilities [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or exceeding 2026 targets, projecting record earnings of over $630 million in adjusted EBITDA [9] - The company remains cautious about macroeconomic factors but believes in the potential for strong growth in the data center sector [29][70] - Management noted that the current political climate in New York is not impacting transaction activity significantly [33] Other Important Information - The company ended the quarter with $224.1 million in cash and cash equivalents and a net leverage ratio of 1 times [10] - The adjusted tax rate for earnings was 12.1% for the quarter, influenced by higher tax-deductible stock compensation [9] Q&A Session Summary Question: Data centers and capital commitment - Management indicated that there is significant interest in data centers and infrastructure, with ongoing efforts to build more facilities [14][15] Question: Drag from hiring and expansion - Management acknowledged that while there is still some drag on earnings from investments, they expect a 10% earnings improvement next year due to purposeful investments [21] Question: 2026 targets and growth outlook - Management confirmed that the 2026 targets are conservative and will be reevaluated in the next earnings call [29] Question: New York City market conditions - Management reported no significant impact from political risks in New York, with strong performance from law firms and financial institutions [33] Question: Capital Markets activity - Management noted strong pipelines and transaction activity, with no signs of slowing down [38] Question: Real Foundations acquisition - Management highlighted the strategic fit of Real Foundations in enhancing their service offerings and expanding their capabilities [42][44]