In This Article:
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Revenue: $665.5 million, up 21.8% from $546.5 million.
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Adjusted EPS: Increased by 40% to $0.21 from $0.15.
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Adjusted EBITDA: $89.2 million, up 40.5% from $63.5 million.
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Adjusted EBITDA Margin: Improved by approximately 180 basis points to 13.4%.
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Leasing Revenues: Increased by 31%.
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Capital Markets Revenues: Grew by 32.7%.
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Management and Servicing Revenues: Increased by 10.5%.
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Compensation Expenses: Increased by 21.8%.
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Tax Rate for Adjusted Earnings: 14.3%.
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Cash and Cash Equivalents: $157.1 million.
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Net Leverage: 1.3 times.
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Share Repurchase Program: $371.9 million remaining.
Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Newmark Group Inc (NASDAQ:NMRK) reported a 22% increase in revenues and approximately 40% growth in earnings metrics for the first quarter of 2025.
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Capital markets grew by 33%, with Newmark outpacing the industry in investment sales and origination.
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Leasing fees increased by 31%, driven by strong activity in major cities like New York City, Boston, and San Francisco.
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Management and servicing revenues rose by over 10%, reflecting strong valuation and advisory growth.
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The company maintains a strong balance sheet and cash flow generation, positioning it well for future growth and market share gains.
Negative Points
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Compensation expenses increased by 21.8%, reflecting higher commission-based revenues and growth initiatives.
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Non-compensation expenses rose due to higher pass-through costs and other revenue-related items.
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The macroeconomic environment remains uncertain, with potential impacts from tariffs and interest rate volatility.
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The CMBS market has slowed down, with banks stepping in to bridge the gap.
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Despite strong performance, the company maintained its guidance due to broader macroeconomic uncertainties.
Q & A Highlights
Q: How is Newmark Group interpreting the macroeconomic uncertainty in relation to its business activities, particularly in leasing and transactions? A: Barry Gosin, CEO, stated that despite macroeconomic uncertainties, deals and leases are continuing to go through without significant changes in decision-making. The CMBS market has slowed, but banks are bridging the gap. It's too early to predict long-term impacts, but the first 100 days have been active, and they will monitor the next 90 days closely.
Q: Are there any changes in the transaction market, such as pulling buildings from the market due to capital market conditions? A: Barry Gosin noted that while interest rates could influence market behavior, they haven't seen a significant slowdown in putting properties on the market. The uncertainty is concerning, but transactions are still occurring.