Q3 2025 Newmark Group Inc Earnings Call

Operator: Foreign.

Operator: Good day and welcome to the Newmark Group Inc. third quarter 2025 financial results call. Today's call is being recorded. At this time, I'd like to turn the call over to Jason McGruder, Head of Investor Relations. Please go ahead.

Good day and welcome to the Newmark Group third quarter 2025 financial results call. Today's call is being recorded at this time I'd like to turn the call over to Jason Mcgruder head of Investor Relations. Please go ahead.

Jason McGruder: Thank you, operator, and good morning. Newmark issued its third quarter 2025 financial results press release this morning. Unless otherwise stated, the results provided on today's call compare only the three months ending September 30, 2025, with a year earlier period. Except as otherwise stated, we will be referring to our results only on a non-GAAP basis, including the terms adjusted earnings and adjusted EBITDA. Unless otherwise stated, any figures discussed today with respect to cash flow from operations refer to net cash provided by operating activities excluding the impact of GSE, FHA, loan origination and sales. We may also use the term cash generated by the business, which is the same operating cash flow measure before the impact of cash used for employee loans.

Thank you operator, and good morning, New Mark issued its third quarter 2025 financial results press release this morning.

Unless otherwise stated the results provided on today's call compare only the three months ended September 32025, with a year earlier period.

Except as otherwise stated, we'll be referring to results only on a non-GAAP basis, including the terms adjusted earnings and adjusted EBITDA unless otherwise stated any figures discussed today with respect to cash flow from operations referred to net cash provided by operating activities, excluding the impact of GSE FHA loan origination and sales.

We may also use the term cash generated by the business, which is the same operating cash flow measure before the impact of cash used for employee loves.

Jason McGruder: Please refer to today's press release, the supplemental tables, and quarterly results presentation on our website for complete updated definitions of any non-GAAP terms, reconciliation of these items to the corresponding GAAP results, and how, when, and why management uses them for additional information on our cash flow measures as well as relevant industry or economic statistics. The outlook discussed today assumes no material acquisitions or meaningful changes in our stock price. Our expectations are subject to change based on various macroeconomic, social, political, and other factors. None of our targets or goals beyond 2025 should be considered formal guidance. Also, I remind you that information on this call contains forward-looking statements, including, without limitation, statements concerning our economic outlook and business. Such statements are subject to risks and uncertainties which could cause our actual results to differ from expectations.

These refer to today's press release supplemental tables and.

In quarter results presentation on our website for complete updated definitions of any non-GAAP terms reconciliation of these items to the corresponding GAAP results and how when and why management uses them for additional information on our cash flow measures as well as relevant industry economic statistics the outlook today.

Today assumes no material acquisitions or meaningful changes in our stock price our expectations are subject to change based on various macroeconomic social political and other factors none of our targets or goals beyond 2025 should be consider formal guidance.

So I remind you that information on this call contains forward looking statements, including without limitation statements concerning our economic outlook and business such statements are subject to risks and uncertainties, which could cause our actual results differ from expectations.

Jason McGruder: Except as required by law, we undertake no obligation to update any forward-looking statements. For a complete discussion of the risks and other factors that may impact these forward-looking statements, see our SEC filings, including, but not limited to, the risk factors and disclosures regarding forward-looking information in our most recent SEC filings, which are incorporated by reference. I'm now happy to turn the call over to our host and Chief Executive Officer, Barry Gosin.

As required by law, we undertake no obligation to update any forward looking statements for complete discussion of the risks and other factors that may impact. These forward looking statements see our SEC filings, including but not limited to the risk factors and disclosures regarding forward looking information in our most recent SEC filings, which are incorporated by reference I'm now happy to turn the call over to our host.

Chief Executive Officer, Barry Gossan.

Barry Gosin: Good morning and thank you for joining us. Newmark again delivered strong quarterly top and bottom line improvements. Our record third quarter revenues included double digit gains across every major business line. Newmark's growth was entirely organic. Earlier this month we acquired Real Foundations, which offers management consulting and outsourced managed services for institutional real estate clients across the U.S., Europe, and Asia Pacific. We also recently launched a fund administration business. Newmark now has one of the most comprehensive sets of investor solutions to drive value for owners of commercial real estate, banks, and debt funds. Coupled with our best-in-class talent and client relationships, we believe Newmark is poised for growth across all of our investor and occupier focused businesses. With respect to our international expansion, this week we launched property and facility management services in India and the APAC region.

Good morning, and thank you for joining us Newmark again delivered strong quarterly top and bottom line improvements.

Our record third quarter revenues included double digit gains across every major business line.

<unk> growth was entirely organic.

Earlier this month, we acquired real foundations, which offers management consulting and outsourced managed services for institutional real estate clients across the U S.

Europe and Asia Pacific.

We also recently launched our fund administration business.

Newmark now has one of the most comprehensive.

Set of Investor solutions to drive that drive value for owners of commercial real estate banks and debt funds.

Coupled with our best in class talent and client relationships. We believe new market is poised for growth across all of our investor in occupier focused businesses.

With respect to our international expansion. This week, we launched property and facility management services in India, and the APAC region. Since the beginning of last year. We have opened nine international offices and hired over 100 revenue generating professionals based outside the U S. This includes expansions in Frac.

Barry Gosin: Since the beginning of last year, we have opened nine international offices and hired over 100 revenue-generating professionals based outside the U.S. This includes expansions in France, Germany, the UK, Singapore, India, South Korea, as well as the UAE. Newmark's client-centric approach, expanding global reach, and our commitment to remaining agile, accountable, and adaptable is resulting in seeing and winning more global occupier assignments. We are becoming the brand of choice. This gives us increased confidence in our stated goal of producing more than $2 billion of recurring revenues annually by 2029. With that, I am happy to turn the call over to our CFO, Mike Rispoli.

<unk>, Germany, the U K, Singapore, India, South Korea, as well as the UAE Newmark client centric approach expanding global reach and our commitment to remaining agile accountable and adaptable is resulting in seeing and winning more global than occupancy.

Higher assignments, we are becoming the brand of choice.

This gives us increased confidence in our stated goal of producing more than $2 billion of recurring revenues annually by 2029.

With that I'm happy to turn the call over to our CFO Mike <unk>.

Yeah.

Mike Rispoli: Thank you Barry and good morning. I'm pleased to report that for the fifth consecutive quarter Newmark produced double-digit revenue and earnings growth. Total revenues were $863.5 million, up 25.9% compared with $685.9 million. We increased management services, servicing and other by 12.6%, leading to the company's best ever quarter for these recurring businesses. This included 23.5% growth from Valuation and Advisory. In addition, our high-margin Servicing and Asset Management platform grew by over 12% when excluding the impact of lower interest rates on escrow earnings. Leasing revenues were up 13.7%, resulting in a record third quarter for this service line. This was led by strong activity in New York, Texas, and Northern California, where we generated growth in office and industrial Capital Markets. Revenues increased by 59.7%, which reflected an approximately 129% improvement in our total debt volumes, nearly two and a half times faster than the industry.

Thank you Barry and good morning.

I am pleased to report that for the fifth consecutive quarter Newmark produced double digit revenue and earnings growth.

Total revenues were $863 5 million up 25, 9% compared with $685 9 million.

We increased management services servicing and other slide 12, 6% leading to the Companys best ever quarter for these recurring businesses.

This included 23, 5% growth from valuation and advisory.

In addition, our high margin servicing and asset management platform grew by over 12% when excluding the impact of lower interest rates on escrow earnings.

Leasing revenues were up 13, 7%.

Resulting in a record third quarter for this service line.

This was led by strong activity in New York, Texas, and Northern California, where.

Where we generated growth in office and industrial.

Yeah.

Capital markets revenues increased by 59, 7%, which reflected an approximately 129% improvement in our total debt volumes.

Two five times faster than the industry.

Mike Rispoli: We increased our Investment Sales volumes by 67%, also significantly outpacing the industry. Turning to expenses, total expenses were up by 24.9%, which reflected a 32.9% increase in our commission-based revenues, higher pass-through costs, as well as investments in growth. We are more confident than ever in meeting or exceeding our 2026 targets of generating record earnings of over $630 million in adjusted EBITDA and $1.75 per share of adjusted EPS. With respect to taxes, the company's tax rate for adjusted earnings was 12.1% in the quarter and 13.2% year to date. The lower rate was primarily driven by higher tax-deductible stock compensation. We have therefore adjusted our full-year range to 13% to 15%. Moving to earnings, we increased adjusted EPS by 27.3% to $0.42 compared with $0.33. Adjusted EBITDA was $145.2 million, up 28.9% versus $112.6 million.

We increased our investment sales volumes by 67% also significantly outpacing the industry.

Turning to expenses total.

<unk> expenses were up by 24, 9%, which reflected a 32, 9% increase in our commission based revenues.

Pass through costs as well as investments in growth.

We are more confident than ever in meeting or exceeding our 2026 targets of generating record earnings of over $630 million and adjusted EBITDA and $1 75 per share of adjusted EPS.

With respect to taxes.

Company's tax rate for adjusted earnings was 12, 1% in the quarter and 13, 2% year to date.

Lower rate was primarily driven by higher tax deductible stock compensation.

We have therefore, adjusted our full year range to 13% to 15%.

Moving to earnings.

We increased adjusted EPS by 27, 3% to 42.

Compared with 33.

Adjusted EBITDA was $145 2 million up 28, 9% versus $112 $6 million.

Mike Rispoli: Our adjusted EBITDA margin on total revenues improved by 40 basis points to 16.8%. For the first nine months of 2025, this margin improved by approximately 116 basis points to 15.2% compared with a year earlier. With respect to share count, our fully diluted weighted average share count was down 1.3% to 251.7 million. Turning to the balance sheet, we ended the quarter with $224.1 million of cash and cash equivalents and 1 times net leverage. The balance sheet changes from year-end 2024 reflected cash generated by the business of $325.5 million and $75 million of incremental borrowing under Newmark's revolving credit facility. This was offset by $177.3 million of cash used mainly to hire revenue generating professionals or $125.5 million of share repurchases and normal seasonal movements in working capital. Newmark continues to generate significant cash flow.

Our adjusted EBITDA margin on total revenues improved by 40 basis points to 16, 8% for.

For the first nine months of 2025 this margin improved by approximately 116 basis points to 15, 2% compared with a year earlier.

With respect to share count.

Our fully diluted weighted average share count was down one 3% to $251 7 million.

Turning to the balance sheet we.

We ended the quarter with $224 $1 million of cash and cash equivalents and one times net leverage.

The balance sheet changes from year end 2024 reflected cash generated by the business of $325 $5 million.

And $75 million of incremental borrowing under new marks revolving credit facility.

This was offset by $177 $3 million of cash used mainly to higher revenue generating professionals.

$125 $5 million of share repurchases.

And normal seasonal movements in working capital.

Newmark continues to generate significant cash flow or.

Mike Rispoli: Our adjusted free cash flow for the trailing twelve months was up 134% to $291.9 million. Moving to guidance, our updated outlook for 2025 is as follows. We now expect total revenues of between $3.175 billion and $3.325 billion, an increase of 18.5%. At the midpoint, we anticipate adjusted EPS between $1.53 and $1.63, up 24% to 33%. We anticipate adjusted EBITDA in the range of $543 million to $579 million, an increase of 22% to 30% and an EBITDA margin improvement of approximately 100 basis points at the midpoint of the range. With that, I would now like to open the call for questions.

Our adjusted free cash flow for the trailing 12 months was up 134% to $291 9 million.

Moving to guidance.

Our updated outlook for 2025 is as follows.

We now expect total revenues of between $3 75 billion and $3 $3 billion to $5 billion.

An increase of 18, 5% at the midpoint.

We anticipate adjusted EPS between $1 53 and.

And $1 63.

Up 24% to 33%.

We anticipate adjusted EBITDA in the range of 543 million to $579 million.

An increase of 22% to 30%.

And an EBITDA margin improvement of approximately 100 basis points at the midpoint of the range.

With that I would now like to open the call for questions.

Operator: Thank you. If you would like to ask a question, you may signal by pressing STAR 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, STAR 1 for questions. We'll take our first question from Alex Goldfarb with Piper Sandler.

Thank you if you would like to ask a question you may signal by pressing star one on your telephone keypad.

You're using a speaker phone. Please make sure your mute function is turned off to allow your signal to reach our equipment. Once again star. One for question. We will take our first question from Alexander Goldfarb with Piper Sandler.

Alex Goldfarb: Hey, morning. Morning down there, Barry. I have two questions. The first question is on data centers. It's been a topic we've discussed before with you guys and certainly just seems to show no slowdown in investor and capital enthusiasm. As your team looks at the amount of capital that's been committed versus the ability to actually build data centers over the next foreseeable future, do you think all the capital can be put to work in the next, whatever, five, ten years, or is there a lot more capital raised versus the physical ability to actually build data centers?

Hey.

Good morning, good morning down there.

I have two questions. The first question is on data centers.

It's been a topic, we've discussed before with you guys and certainly yes.

Seems to show no slowdown in Investor capital enthusiasm as your team looks at the amount of capital that's been committed versus the ability to actually build data centers over the next <unk>.

Foreseeable future do you think all the capital is can be put to work in the next whatever 510 years or is there a lot more capital raised versus the physical ability to actually build dataset.

Data centers.

Barry Gosin: America is a big place. There is quite a bit of land and there's quite a bit of gas, and there's an effort long term to build nuclear, both micro and large scale nuclear. We were just involved in a company going public building a nuclear plant in Texas. We were involved in a Series C and then they were taken public. We'll see a lot more of that. On the exit there'll be a lot of that. In respect of some of these hyperscalers figuring a way to exit and raise more capital, there is an endless amount of interest in data centers. We produce about 3 gigs a year, I think. I believe that's a number. We've seen people and estimates as high as 100 to 200 gigawatts of power. The country is going to require an enormous amount of infrastructure.

America is a big place there is.

A bit of land and there is quite a bit of gas and there is there is an effort long term to build nuclear both micro and large scale nuclear.

We were just involved in the company going public Bill.

Building a nuclear plant in Texas.

We did have we were above that a series C. And then they would take them public.

And we will see a lot more of that I mean on the exit there'll be a lot of lot of a lot of that in respect of some of these hyperscale or figure out way to exit and raise more capital.

There is an endless amount of interest in data centers.

We produce about three gigs a year I think I believe that's the number.

We've seen people and estimates as high as 100 to 200 gig gigawatts of power.

So the country is going to require an enormous amount of infrastructure. So it's not just data centers, its infrastructure and infrastructure, meaning nuclear plants and power plants and pipelines and.

Barry Gosin: It's not just data centers, it's infrastructure, and infrastructure meaning nuclear plants and power plants and pipelines and data centers and quantum computing and a host of other things that surround it and support it on the industrial side of the business. Generally, if you look at the GDP, the GDP was primarily the investment in this kind of infrastructure. I think it has a lot of traction. As I said before probably three quarters ago, if you believe in AI, you'll believe in the future. There is runway.

And data centers and quantum computing.

And a host of other things that surround it and support it on the industrial side of the business.

So generally I mean, if you look at the GDP. The GDP was primarily the investment in this kind of infrastructure. So I think it has a lot of traction.

<unk>.

And again as I've said before probably three quarters ago. If you believe in AI.

You will believe in the future and so there is runway.

Alex Goldfarb: Do you think it's, I mean, the point is it sounds like there's, we all know there's a lot out there of potential needs. It just sounds like physically building the infrastructure, the laying, the utilities, building the power plants, like all this stuff, it sounds like the capital has gotten ahead of itself. Do you think that's the case, or you think that the capital raised can commensurately basically go into production pretty quickly?

But do you think I mean, but the point is it sounds like there is we all know theres a lot out there of potential needs, but it just sounds like physically building the infrastructure. The laying the utility is building power plants like all this stuff. It sounds like the capital has gotten ahead of itself do you think thats the case or you think that the capital raised can commensurately.

Basically go in go into production.

In pretty quickly.

Barry Gosin: There is a lot of production going on, but there will be a lot more. I mean, the capital comes first. We're on the capital side, so that's good for us. Raising the capital to build is good for us. I mean, just look at the numbers and the predictions are there's going to be a lot more capital required. I mean, on the end when it's built, we'll be there with financing and going public and doing all those kind of things. We're following the continuum, will be a beneficiary of the future, but we're also right there in the beginning.

Well there is a lot of production going on but there will be a lot more.

The capital comes first were aware on the capital side. So that's that's good for us.

Raising the capital.

The Bill is good for US I mean, just look at the numbers.

That prediction theres going to be a lot more capital required.

I mean on the end when its built will be there with financing and going public and doing all of those kind of things. So.

We're following the continuum will be a benefit beneficiary of the future, but we're also right there in the beginning.

Alex Goldfarb: Okay, and then the second question is, years ago, when you were investing in hiring a lot of different producers and expanding into new areas, acquiring smaller shops, there was a lot of drag initially from those hires. You spent the money to onboard them. It took a while for them to deliver. Recently, that seems to be a thing of the past. You guys have been expanding into Europe. You mentioned the expansion in India, et cetera. Is all of that drag that we experienced years ago when you were onboarding producers just a thing of the past, or has the company gotten big enough, or is it where the stock price is today? I'm just trying to understand because it's a pretty sharp contrast now as you grow and expand. It doesn't seem to have a slowdown to earnings, whereas years ago it did.

Okay and then the second question is years ago. When you were investing in hiring a lot of different producers and expanding into new areas acquiring smaller shops. There was a lot of drag initially from those hires you spent the money to onboard them. It took a while for them to deliver recently that.

Seems to be a thing of the past and you guys have been expanding into Europe, you've mentioned.

Our expansion.

In India et cetera is all of that drag.

Drag that we experienced years ago. When you were onboarding producers is that just a thing of the past towards the company gotten big enough for us at where the stock price is today, just trying to understand because it's a pretty sharp contrast, now as you grow and expand it doesn't seem to have a slowdown to earnings whereas years ago. It did.

Mike Rispoli: Morning, Alex, it's Mike. I'll take that one. Of course, it still has a drag on earnings. We're going to grow nicely this year and expand our EBITDA margins by 100 basis points. Had we not been investing for the future, that could have been double the EBITDA expansion. What I would say is the investments we're making today, which are very purposeful and you can see we've accelerated as we move throughout this year, are going to result in 10% earnings improvement next year. That is our model. We're very intentional about it. We can grow margin while expanding the business and continuing to invest and we'll continue to do that.

Good morning, Alex It's Mike I'll take that one.

Of course, it still has a drag on earnings we're going to grow nicely this year and expand our EBITDA margins by 100 basis points.

Had we not been investing for the future that could have been double.

EBIT expansion, what I would say is the investments we're making today.

You are very purposeful and you can see we've accelerated as we moved throughout this year are going to result in 10% earnings improvement next year.

And so that is that as our model, we're very intentional about it.

And we can grow margin, while expanding the business and continuing to invest and we'll continue to do that.

I mean, we are going.

Barry Gosin: We're going to continue to grow the company, Alex, and there's still running room, there's still white space, and we are still putting all the pieces together to build a complete foundation. We are now winning more and seeing more, like I just said. What does that mean? That means we're going to have more market share on the things that we have now, put all the pieces together in whatever spectrum of activities that are required in that vertical. Once we're there, we pitch the business, we'll have a higher ratio of win rates, and our volume will go up without any capital requirements. You could see that in some of our businesses. It's more apparent because we've already built it. It's happening. We're winning market share.

We're going to continue to grow the company Alex and there are they are still running room. There is still white space and we are still putting all the pieces together to be a complete.

To build a complete foundation, we are now winning more and seeing more like I just said.

What does that mean that means we're going to we're just going to have more market share on the things that we have now put all the pieces together in whatever spectrum of activities that are required in that vertical and once we're there and we pitch the business.

We will have a higher ratio of win rates and our our volume will go up without any any capital requirements and that you could see in some of our businesses. It's more apparent because we've already built it.

It's happening, we're winning market share so theres not theres other vertical that we're working on not to mention all of the recurring revenue businesses that are around the hoop and supporting all of the the other other businesses that we've created.

Barry Gosin: There are other verticals that we're working on, not to mention all of the recurring revenue businesses that are around the hoop and supporting all of the other businesses that we've created.

Alex Goldfarb: Thank you.

Thank you.

Operator: We'll take our next question from Jade Rahmani with KBW.

We'll take our next question from Jade Rahmani with <unk>.

Jade Rahmani: Thank you very much. The 2026 targets that Mike Rispoli reiterated, when were those conceived?

Thank you very much the 2026 targets that Mike.

Reiterated when would those.

Conceived.

Mike Rispoli: Morning, Jade. We've had those targets out there for a while, as you know. Certainly we'll get through the fourth quarter and we'll give formal guidance for 2026 probably on our next earnings call. We feel very confident, and that's still double digit growth from the midpoint of our guidance range this year. We'll certainly reevaluate that next quarter.

Good morning, Jade, we thought those targets out there for a while as you know.

Certainly we will get through the fourth quarter, and we will give formal guidance for 2026.

On our next earnings call, but we feel very confident and that's still double digit growth from the midpoint of our guidance range. This year. So.

We will certainly reevaluate that next quarter.

Barry Gosin: Jay, it was a couple of years ago. You just look back at the earnings calls. We've predicted that for a while.

The JV with a couple of years ago.

When you just look back at the earnings calls.

We predicted that for a while.

Jade Rahmani: Yes. What I'm trying to imply or suggest is that since they were created prior to the very robust growth that Newmark has demonstrated across its businesses, particularly capital markets, plus the data center fundraising wave in which Newmark is taking part, the outlook 2026, as previously mentioned, seems quite conservative. Growth coming out of serious recoveries tends to be a lot stronger than that. The recovery thus far, macro risks notwithstanding, seems to be gaining momentum. Do you believe that those targets are conservative and are you also seeing anything in the macro economy that would cause you to be erring on this side of caution?

Yes, well, what I'm trying to imply or suggest is that since they were created prior to the very robust growth that newmark has demonstrated across its businesses, particularly capital markets plus the data Center fund raising wave in which new Mark is.

<unk> part.

The outlook.

26 as previously.

Mentioned seems quite conservative.

Growth coming out of theory recoveries tends to be a lot stronger than that and the recovery, thus far macro risks notwithstanding seem to be gaining momentum so.

Do you believe that.

Those targets are conservative.

Are you also seeing anything in the macro economy that would cause you to be.

Erring on the side of caution.

Mike Rispoli: I would say it's always good to be a little cautious. Certainly, those are conservative targets, and you know, we'll give you an update next quarter once we get through the full year.

I would say, it's always good to be a little cautious certainly those are conservative targets and.

We will give you an update next quarter once we get through the full year.

Jade Rahmani: Thank you very much. Great job.

Thank you very much great job.

Operator: We'll take our next question from Julien Blouin with Goldman Sachs.

We'll take our next question from Julian <unk> with Goldman Sachs.

Julien Blouin: Hi, thank you for the question and congrats on a strong quarter. Barry, I wanted to ask about New York City. I mean, third quarter CRE transactions and leasing in the city looked really strong, but we continue to hear signs that institutional investors, especially abroad, are maybe beginning to worry about political risk in the city related to the mayoral race, I guess. Are you seeing any sign of impact or any cautiousness from buyers in the city?

Hi, Thank you for the question and congrats on the strong quarter.

Barry I wanted to ask about New York City, I mean third quarter, CRE transactions and leasing in the city.

Looked really strong.

But we continue to hear.

Sign from institutional.

Sure investors, especially a broader maybe beginning to worry about political risk in the city.

Related to the mayoral race I guess are you seeing any sign of impact or any cautiousness from buyers.

In the city.

Barry Gosin: Not really. I mean, there's a lot of noise around the mayor, but as I said probably two calls ago, the mayor has limited power. The governor's race, the governor really is the firewall for the city. That's really, and the federal government on what the federal government is going to treat New York, but that's New York State as well as New York. I don't really, I believe it's a lot, it's just a lot of noise. New York is, New York is, the law firms are doing great. The financial institutions are all expanding, all of our clients are expanding. I don't really see it.

Not really.

There's a lot of noise around the mayor, but as I said, probably two calls ago.

The mayor has limited power.

The Governor's race the.

The Governor really is the firewall for the city.

That's really and the federal government.

What the federal the federal government is connected.

New York, New York State.

As well as New York So.

Yes.

I don't I don't really I believe it's.

It's a lot of it is just a lot of noise.

New York is New York is the law firms are doing great. The financial institutions are all expanding all of our clients are expanding.

So I don't I don't really see it.

Mike Rispoli: Got it.

Got it that's helpful.

Julien Blouin: That's helpful. Mike, can you help us understand maybe the cadence of capital markets across the quarter? Was September particularly strong given rates coming down? Did you see sort of a follow through of that activity into October, and maybe how do pipelines compare to this time last year?

And then Mike can you help us understand maybe the cadence of capital market across the quarter with timber, particularly strong given rates coming down and did you see sort of a follow through.

Of that activity into October and then maybe how do your pipeline compared to this time last year.

Mike Rispoli: I wouldn't say there was any particular, anything within months that would stand out to me. It was a strong quarter across the board for us. The pipelines remain really strong into the fourth quarter. You could see that in our guidance, and we feel pretty good. We don't see anything in the market that is slowing transaction activity down at the moment.

I wouldn't say there was any particular.

Anything within months, then that would stand out to me was.

A strong quarter across the board for us.

Pipelines remain really strong into the fourth quarter.

You can see that in our guidance.

<unk>.

We feel pretty good we don't see anything in the market that is slowing transaction activity down at the moment.

Julien Blouin: Okay, great. Thank you.

Okay, great. Thank you.

Operator: As a reminder, if you'd like to ask a question, please signal by pressing Star 1. We'll go next to Mitch Germain with Citizens Bank.

As a reminder, if you'd like to ask a question. Please signal by pressing star one well go next to Mitch Germain with citizens Bank.

Lou Alvarado: Thank you and congrats on the quarter. Just maybe on the Real Foundations transaction, Barry, just maybe talk about, you know, kind of your view of the fit and potential to expand or cross-sell that platform.

Thank you and congrats on the quarter I'm, just maybe on the real Foundation transaction, Barry just maybe talk about kind of.

Your view of the fit and potential to expand or cross sell that platform.

Barry Gosin: We look at ourselves as a pure play. For the most part, we are designing a business to be able to be a partner with institutional investors to help them execute on their strategy. That means all things for them to help them leverage companies like us to be able to do more. What Real Foundations is, is both a consulting firm and a technology advisor. They implement and integrate, for example, MRI and Yardi, which are the two biggest technology platforms for investors. They can go in and advise a company on which tech, how to integrate it, and how to get the maximum out of it. That's a piece of all the other things that we've done: real estate, property, accounting, staffing, due diligence, cost monitoring. All those pieces fit neatly together and bridge the gaps between a holistic solution as becoming the go-to firm.

So.

We look at ourselves as a pure play.

For the most part.

We are designing a business to be able to be a partner with institutional investors to help them.

Execute on their strategy and that means all things for them to help them leverage companies like us to be able to do more and what real foundation as both a consulting firm in a technology advisor they implemented integrate.

For example, MRI and you're already which are the two biggest technology platforms for investors and how they manage.

They can go in and advise the company on which which Tac.

How to integrate it and how to get the maximum out of it now that's a piece of all the other things that we've done real estate property accounting.

Staffing.

Due diligence cost monitoring.

So so all of those pieces fit neatly together and bridge the gaps between our holistic solution.

<unk> is becoming the go to firm when a fund is thinking about.

Barry Gosin: When a fund is thinking about how they want to operate, some would prefer to operate with everything in-house and some prefer to operate with some of this outsourced. We hired great people, we bought great companies. Our strategy is about centers of excellence and people who are excellent. If we continue to hire the kind of talent that our clients rely on, we think we will be the go-to brand for that kind of business. We think that has enormous traction. We launched fund administration as well, and without Real Foundations, it would have been much harder for us to deliver on fund administration. We put the pieces together very carefully, we thought about it, and we think we now have an incredible array of services to provide a very comprehensive solution.

How they want to operate and some would prefer to operate with everything in house and some prefer to operate with some of this outsource.

We hire great people, we bought great companies. Our strategy is about centers of excellence and people who are excellent and if we continue to hire the kind of talent that our clients rely on we think will be.

The go to brand for that kind of business and we think that has has enormous traction we launched fund administration as well and without without real foundations, who had been a much harder for us to deliver on fund administration. So so we put the pieces together.

Carefully we thought about it and we think we now have an incredible array of services to provide a very comprehensive solution.

Lou Alvarado: Great, that's super helpful. If I can. No, this is Lou Alvarado. If I can. Sorry about that. My thoughts, the other value that we saw in Real Foundations is to augment our growth in occupier solutions. They were primarily investor focused, but we saw a lot of the skills that they have and the talent that they bring really blends well with our occupier platform as well. As we have significantly grown that and continue to focus on growing that, we think Real Foundations will be an excellent match for us. That was part of the reason why Real Foundations also picked us to be a partner with them in their growth as well as ours. Great, thanks for that perspective. Barry, obviously you've been making a lot of hires outside the U.S. opening new offices.

Great that's super helpful and Michel Yes go ahead.

No. This is this is luis Alvarado, so I can answer some of that level of sorry about that my thoughts.

The other value that we saw a real foundation is to augment our growth in occupier solutions right. So they were primarily investor focus that we saw a lot of the skills that they have and the talent that they bring.

Really blends well with our occupier platform as well as we have significantly grown that and continue to focus on growing that we think real foundations will be an excellent match for us and that was part of the reason while real Foundation has also picked us to be a partner with them in their growth as well as ours.

Great Thanks for that perspective.

Barry obviously you've.

We're making a lot of hires outside the U S opening new offices.

Lou Alvarado: I'm curious about your views about organically growing services, platform, facilities management and other services versus more traditional brokerage and kind of how you view that organic growth and the timeline to augment those capabilities on a global scale.

I'm curious about your views about organically growing.

Services platform facilities management, and other services versus more traditional brokerage and.

Kind of how you view that organic growth in the timeline.

To augment those capabilities on a global scale.

Barry Gosin: It's accelerating. We're putting all the pieces together the same way we did on the investor side. We're doing it the same way on the facility management and the occupier solutions side. Lou's absolutely right. I mean, when you know, we have clients on the occupier side who use the same technology, and to be able to help them implement a technology strategy to manage their real estate better will give us a leg up on the competition. We need to be in the geographies, we need to be in all the verticals, and we need to be out there. I think that our reception in Europe has been incredible. The same, you know, the talented people want to be with us, and they're joining the firm because of how we approach the business. As I said, agile, accountable, nimble. We provide customized solutions.

Well, we it's accelerating.

We are putting all the pieces together the same way we would do what we did on the investor side, we're doing it.

Same way on the facility management in the occupier solution side lose absolutely right I mean, when we have clients on the occupier side, who use the same technology and to be able to help them implemented technology strategy to manage their real estate better will give us a leg up on the competition.

We need to be in and the geographies, we need to be in the all of the verticals and we need to.

The out there I think that our reception in Europe.

Has it been incredible.

At the same the talented people want to be with us.

And they're joining the firm because of how we approach the business said agile accountable nimble.

We provide customized solutions, it's easier for us to provide customized solutions for clients and not just a black box.

Barry Gosin: It's easier for us to provide customized solutions for clients and not just a black box. We're not overly pregnant in certain areas, so it gives us the ability to be adaptable for our clients. All the things are coming together, and as we continue to put in, you know, hit a geography and have that geography, we were invited to many more parties.

We're not overly pregnant in certain areas, so that gives us the ability to be.

Adaptable for our clients. So all the things are coming together and as we continue to put in.

Geography, and certainly have that geography when we.

We were invited to many more.

Parties.

Lou Alvarado: Thank you.

Thank you.

Operator: Thank you. We'll take a follow-up question from Jade Rahmani with KBW.

Thank you, we'll take a follow up question from Jade Rahmani with K B W.

Barry Gosin: Thank you very much. I just wanted to ask if there's anything in the fourth quarter 2024 comp period that you want to call out. For example, you know, leasing commissions were up 15.1%. That's a tougher comp than what you dealt with this quarter. You know, capital markets of course was very strong last year, but given the strength this quarter, it seems achievable to exceed that. Anything on the expense side, just so we're aware.

Thank you very much I just wanted to ask if there's anything in the.

Fourth quarter 'twenty four comp period that you want to call out for example, leasing commissions were up 15, 1%. So that's a tougher comp than what you dealt with this quarter.

Capital markets of course was very strong last year, but given the strength this quarter it seems achievable to exceed that.

And then anything on the expense side, just so everywhere.

Operator: Sure.

Mike Rispoli: I think generally Q4 is going to be a tougher comp for us. We were up 17% last year in 2024 in the fourth quarter. That's all been thought through and reflected in the guidance that we provided both in terms of top line and bottom line. The pipeline continues to remain strong and really it just comes down to when do transactions close. As you know, there's always some that are going to push out, some that are going to pull in. We thought through that as we gave you the guidance range that we put out today.

Sure I think generally Q4 is going to be a tougher comp for us were up 17% last year and 24 in the fourth quarter.

But that's all been thought through and reflected in the guidance that we provided both in terms of topline and bottom line.

The pipeline continues to remain strong.

It really just comes down to when the transactions close and as you know there's always some that are going to push out some that are going to pull in.

And we thought through that as we as we gave you the guidance range that we put out today.

Barry Gosin: Thanks very much.

Thanks very much.

Operator: Thank you. We'll take a follow up question from Julien Blouin with Goldman Sachs.

Thank you, we'll take a follow up question from Julien fluent with Goldman Sachs.

Julien Blouin: Thank you. Just a quick follow-up, Barry, following on from Alex's question on data centers. Your data center capital markets volumes have been really impressive this year, particularly on the financing side. Can you just maybe talk through the team you've built there, how you've been able to build such a dominant early foothold in the space? How should we think about the growth in data center financing volumes and investment sales going forward?

Thank you.

Just a quick follow up Barry.

Following on from Alex's question on data centers your datacenter capital markets volumes have been really impressive this year.

Particularly on the financing side can you just maybe talk through the team you've built there how you've been able to build such a dominant early foothold in this space and then how should we think about the growth in data center financing volumes and investment sales going forward.

Barry Gosin: You know what's interesting, a couple years ago we brought in experts in our Valuation and Advisory group that do risk assessment and stress testing for banks. The idea is to be early and early as often as you can. We saw signs of the, you know, the data center business. We acted quickly. That goes into the definition of nimble. We hired people quickly and we got in front of it and we have incredibly good people that can adapt as well. We put together an incredible team of people and we're still building it actually. We're building more on the Leasing side of it because you're still going to have, you know, cloud computing.

What's interesting couple of years ago, we brought in.

Experts in our evaluation group.

That.

Risk assessment and stress testing for banks the ideas to be early.

And early as often as you can.

We saw signs.

Uh huh.

The data center business reacted quickly.

Goes into the definition of nimble.

We hired people quickly.

And we got in front of it and we have incredibly good people that can.

Can adapt as well so.

We put together an incredible team of people.

And we still we're still building it actually we are building more on the leasing side of it.

And the.

Because theres still youre still going to have.

Cloud computing, you're going to still have some of the old co location facilities that are going to change out their racking systems.

Barry Gosin: You're going to still have some of the old colocation facilities that are going to change out their racking systems to have better cooling and more capability for the new AI chipset that provide much more heat and much higher level of computing. There is a whole business of adapting some of the old colocation facilities for the new environment and we'll be involved in that kind of stuff. We still continue to hire good people. It's just all about talent. I mean everything in all of our verticals, it's about getting the right people in the right place and not overcrowding.

To have better cooling and more capability for the new AI chipset.

Debt.

Provide much more heat and.

And much higher level of computing. So there is a whole business of adapting some of the old colocation facilities to the new environment, and we will be involved in that kind of stuff. So.

So we're still we still continue to hire good people, it's just all about talent.

And then there's everything in all of our in all of our verticals, it's about getting the right people in the right place.

And not overcrowding.

Julien Blouin: Thank you.

Thank you.

Operator: Thank you. We'll take a follow-up question from Alex Goldfarb with Piper Sandler.

Thank you we'll take a question a follow up question from Alexander Goldfarb with.

Piper Sandler.

Alex Goldfarb: Hey, thank you. Barry, just want to continue that a while back, if my recollection is right, when you and I discussed this, there was the comparison to life science and how you didn't want to overcommit from an investment to data centers. Just given that real estate tends to follow boom-bust cycles, it doesn't mean it's out. It just means there's a big boom and then there's a cooling and then it grows from there. Obviously, life science, you know, went crazy during COVID and now it's dealing with the consequences. From a staffing level, are you now feeling more bullish that this has longer legs to hire more or you're still of that restraint mentality, which is, we don't want to get too far over our skis on this. It's a great sector, but every sector that has huge growth eventually has a cooling period.

Hey, Thank you.

Just wanted to continue that a while back.

If my recollection is right when you and I discussed this.

As a comparison to life science, and how you didn't want to Overcommit from an investment to data centers, just given that real estate tends to follow a boom bust cycles doesn't mean, it's out it just means hey, theres, a big boom and then Theres a cooling and then it grows from there obviously life science.

When crazy during Covid and now it's dealing with the consequences. So from a staffing level are you now feeling more bullish that this has longer legs to hire more or you're still have that restraint mentality, which is hey, we don't want to get too far over our skis on this it's a great sector, but.

Every sector that has huge growth eventually has a cooling period and we just want to maintain staffing appropriately.

Alex Goldfarb: We just want to maintain staffing appropriately.

Barry Gosin: We're always. We always view doing more with less. That's just our operating model. If you have great people, you can flex up and down. When you get overly committed on anything, it's hard to go the other way. We think we're appropriately staffed to scale now. We think there are parts of it that we could expand in the geographies, probably more on the leasing side of the data center business. Money's fungible. It travels everywhere. We can do it with our team and flexing our team the way it is. Our strategy is more with less, not more.

We're always.

We're always we always view doing more with less.

That's just.

With our operating model.

If you have great people, you can flex up and down when you get.

Overly committed on anything it's hard to go the other way so we.

We think we're appropriately staffed to scale now we think there are parts of it that we could expand.

And the geographies more on probably more on the leasing side of the data center business, but <unk>.

Money is fungible travels everywhere.

We can do it with our team and flexing our team the way it is.

Our strategy is more with less not more.

Alex Goldfarb: Thank you.

Thank you.

Operator: Thank you. With no additional questions in queue at this time, I'd like to turn the call back over to Barry Gosin for any additional or closing remarks.

Thank you with no additional questions in queue at this time I would like to turn the call back over to Barry Johnston for any additional or closing remarks.

Barry Gosin: Once again, I'd like to thank everybody for joining, and I look forward to updating you next quarter.

Once again I'd like to thank everybody for joining and I look forward to updating you next quarter.

Operator: That will conclude today's call. We appreciate your participation.

That will conclude today's call. We appreciate your participation.

Yes.

Okay.

Yes.

Okay.

Yes.

Yeah.

Yeah.

Operator: Please stand by. The conference will begin shortly.

Please standby the conference will begin shortly.