Newmark Group Inc (NMRK) Q3 2024 Earnings Call Highlights: Strong Revenue Growth and Strategic ...

GuruFocus News
3 min read

In This Article:

  • Total Revenue: $685.9 million, up 11.3%.

  • Adjusted EPS: $0.33, up 22.2%.

  • Adjusted EBITDA: $112.6 million, up 17%.

  • Capital Markets Revenue: Increased by 18.5%.

  • Mortgage Brokerage Volume: Increased by 77%.

  • Fannie Mae Origination Volumes: Increased by 58% over the trailing 12 months.

  • Leasing Fees: Increased by 6%.

  • Management Services and Servicing Revenue: Increased by 11.4%.

  • Compensation Expenses: Up 6.3%.

  • Non-Compensation Expenses: Up 9.3%.

  • Tax Rate for Adjusted Earnings: 13.4%.

  • Share Repurchase: 7.6 million shares for $100.8 million.

  • Cash and Cash Equivalents: $178.6 million.

  • Corporate Debt: $770.4 million.

  • Net Leverage: 1.4 times.

  • Full Year 2024 Revenue Guidance: $2.620 billion to $2.680 billion, up 6% to 9%.

  • Full Year 2024 Adjusted EPS Guidance: $1.11 to $1.17, up 6% to 11%.

  • Full Year 2024 Adjusted EBITDA Guidance: $410 million to $430 million, up 3% to 8%.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Newmark Group Inc (NASDAQ:NMRK) reported an 11.3% increase in total revenues, reaching $685.9 million.

  • Capital markets revenues increased by over 18%, marking the fourth consecutive quarter of double-digit improvement.

  • Fannie Mae origination volumes rose by 58% over the trailing 12 months, supporting future growth in high-margin primary servicing.

  • Leasing fees increased by 6%, driven by growth in retail and industrial sectors.

  • The company repurchased 7.6 million shares and units for $100.8 million, with an increased share buyback program authorized to $400 million.

Negative Points

  • Leasing growth of 5.6% was lower compared to other revenue line items.

  • Adjusted EBITDA guidance was slightly reduced, implying a lower margin profile than previously expected.

  • Office leasing remains complicated, with challenges in the segment despite some positive trends.

  • The commercial mortgage business outperformed investment sales, reflecting market dynamics that may not favor sales growth in the short term.

  • The adjusted earnings tax rate increased to 13.4% from 15.7% last year, indicating higher tax expenses.

Q & A Highlights

Q: How should we think about Newmark's office leasing commissions contribution in the quarter, and what is the potential upside for leasing commission contribution for office along with the strong performance of retail and industrial? A: Michael Rispoli, CFO: Our office leasing pipeline is strong, and we expect good performance year-over-year. We see office mandates returning and anticipate continued strength into 2025. Retail and industrial leasing also show significant activity, with data centers and cold storage being particularly active sectors.

Recommended Stories