In This Article:
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Total Transaction Volume: $11.6 billion in Q3, up 36% year-over-year and 37% sequentially from Q2 2024.
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Earnings Per Share (EPS): 85 per share, up 33% year-over-year.
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Adjusted EBITDA and Adjusted Core EPS: Both up 7% year-over-year.
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Property Sales Volume: $3.6 billion in Q3, up 44% year-over-year.
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GSE Loan Volume: $3.5 billion in Q3.
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MSR Revenue: Up 23% year-over-year.
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HUD Lending Volumes: Grew over 200% to $272 million in Q3.
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Servicing Portfolio: $134 billion at the end of Q3.
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Total Managed Portfolio: $152 billion, including $134 billion servicing portfolio and $18 billion assets under management.
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Net Income for Capital Markets Segment: $22 million, up 210%.
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Provision for Credit Losses: $3 million recognized in the quarter.
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Year-to-Date Diluted EPS: $1.87 per share, down 17% year-over-year.
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Operating Margin: 10% year-to-date.
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Return on Equity: 5% year-to-date.
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Adjusted EBITDA Year-to-Date: $234 million, up 10%.
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Adjusted Core EPS Year-to-Date: $3.60, up 11%.
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Cash on Balance Sheet: $180 million at the end of Q3.
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Quarterly Dividend: 65 per share.
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Walker & Dunlop Inc (NYSE:WD) reported a 36% increase in total transaction volume in Q3 2024, reaching $11.6 billion, indicating strong market activity.
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The company achieved a 33% year-over-year growth in earnings per share, reaching 85 cents per share.
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WD's GSE loan volumes saw a meaningful uptick, contributing to a 23% increase in MSR revenue year-over-year.
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The company experienced significant growth in HUD lending volumes, which grew over 200% to $272 million in Q3.
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WD's servicing portfolio remains robust, ending the quarter with $134 billion, generating stable recurring revenues with strong credit fundamentals.
Negative Points
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Despite the increase in transaction volume, total revenues only grew by 9%, indicating a potential issue with revenue mix or transaction fees.
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WD's affordable equity revenues were down 37% due to a decline in tax credit syndications and asset dispositions during the quarter.
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The company recognized a $3 million provision for credit losses, indicating some challenges within its credit risk portfolio.
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Fannie Mae requested WD to repurchase two additional loans totaling $26 million, both of which are defaulted loans.
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The company faces potential risks from interest rate volatility, which could impact transaction volumes and servicing portfolio duration.
Q & A Highlights
Q: Can you provide insights on the property sales volume and how much was pulled from the pipeline versus opportunistic deals? A: The gestation period from a broker opinion of value to listing and transaction is longer than a quarter. We have seen a significant uptick in both the pipeline and transaction volumes, and the investment sales pipeline is holding strong into Q4. Gregory Florkowski, CFO