Colliers International(CIGI) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q4 2025, the company generated revenues of $1.6 billion, up 5% year-over-year, with adjusted EBITDA of $245 million, reflecting a 6% increase [10][11] - Full-year internal revenue growth was solid at 5%, with commercial real estate segment net revenue up 7% [10][11] - Investment management ended the year with over $108 billion in assets under management, flat relative to September 30 [6][14] Business Line Data and Key Metrics Changes - Capital Markets revenues increased by 13%, driven by strong activity in the U.S., while leasing revenues rose by 3% [11][12] - Outsourcing solutions grew by 8%, with valuation practices contributing significantly [11] - Engineering segment net revenue was up 8%, supported by recent acquisitions, with a strong revenue backlog providing visibility for future growth [12][16] Market Data and Key Metrics Changes - The U.S. market showed strong performance, particularly in Capital Markets and leasing activities, while EMEA and Asia Pacific experienced modest growth [11][35] - The company expects low teens top-line growth in commercial real estate for 2026, with Capital Markets projected to grow in the high teens [16][63] Company Strategy and Development Direction - The company is focused on expanding its diversified platform and pursuing further acquisitions, with the recent acquisition of Ayesa Engineering expected to enhance growth opportunities [4][5] - AI is viewed as a productivity and growth enabler, helping to automate routine tasks and improve efficiency across all segments [8][9] - The company aims to maintain a strong partnership model, emphasizing inside ownership to align leaders with clients and shareholders [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2026 with strong momentum and a healthy pipeline, expecting solid internal growth and contributions from recent acquisitions [7][16] - The company anticipates mid-teens growth across key operating metrics, driven by favorable trends in infrastructure and urbanization [16][63] Other Important Information - The company plans to maintain leverage at around 2x, with the recent acquisition expected to add approximately 0.7 turns of leverage on a pro forma basis [15][70] - Fundraising targets for 2026 are set between $6 billion and $9 billion, with several funds currently in the market [13][66] Q&A Session Summary Question: Organic growth in engineering - Management noted strong demand for services, with opportunities to increase pricing and a growing workforce to meet demand [19][20] Question: Capital allocation and share buybacks - Management indicated a preference for careful capital management, with no immediate plans for stock buybacks due to ongoing acquisitions [28] Question: Macro perspective on Capital Markets - Management does not expect rate cuts to impact their outlook, citing pent-up demand for transactions as a key driver for growth [35][36] Question: AI's impact on business - Management sees AI as a margin enhancer rather than a disruptor, emphasizing its role in improving efficiency and decision-making [72] Question: Ayesa acquisition and growth expectations - Management expects high single-digit organic growth for Ayesa, leveraging its expertise in high-demand markets [80][81] Question: Fund performance and fundraising - Fund performance has been strong, with the flagship fund exceeding benchmarks, aiding in fundraising efforts [67][68]