• Revenue: Increased by 18.8% to $888.3 million.
• Management and Servicing Revenue: Grew by 21.1%.
• Leasing Revenue: Increased by 15.1%.
• Capital Markets Revenue: Grew by 20%.
• Adjusted EPS: Increased by 19.6% to $0.55.
• Adjusted EBITDA: Increased by 10.1% to $182.9 million.
• EBITDA Margin: Improved by approximately 55 basis points to 16.2% for the full year 2024.
• Cash and Cash Equivalents: Ended the year with $197.7 million.
• Net Leverage: 1.1x.
• Cash Generated from Business: $437.6 million, representing approximately 98% EBITDA conversion.
• Share Repurchase: 2.1 million shares and units for $31.4 million in the quarter; 18.6 million shares and units for $224.9 million for the full year.
• 2025 Revenue Guidance: Expected between $2.9 billion and $3.1 billion.
• 2025 Adjusted EPS Guidance: Expected between $1.40 and $1.50.
• 2025 Adjusted EBITDA Guidance: Expected between $495 million and $545 million.

• Warning! GuruFocus has detected 3 Warning Signs with NMRK.

Release Date: February 14, 2025

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

Positive Points

• Newmark Group Inc (NASDAQ:NMRK) achieved double-digit top line improvement across every major business line in the fourth quarter of 2024.
• The company increased its U.S. debt market share by approximately 300 basis points to 9%, a significant growth from 1.5% in 2015.
• Newmark Group Inc (NASDAQ:NMRK) reported a strong revenue growth of 18.8% to $888.3 million, with leasing revenues increasing by 15.1% and capital markets revenues by 20%.
• The company anticipates strong revenue and earnings growth in 2025, with a target of at least $630 million of adjusted EBITDA by 2026.
• Newmark Group Inc (NASDAQ:NMRK) has a healthy balance sheet with $197.7 million of cash and cash equivalents and 1.1x net leverage, positioning it well for future growth and shareholder returns.

Negative Points

• Compensation expenses increased by 13.4%, reflecting higher commission-based revenues and growth-related costs.
• Non-compensation expenses rose by 8.2%, including higher pass-through costs and increased warehouse interest expense.
• The company's tax rate for adjusted earnings was 13.9% in the quarter, slightly higher than previous quarters.
• There are market headwinds that could impact capital markets activity, although the company remains optimistic about growth.
• Leadership turnover, such as Howard Lutnick's nomination for U.S. Secretary of Commerce, could introduce uncertainties in the company's strategic direction.

Q & A Highlights

Q: How does Howard Lutnick's departure impact the earnings outlook and D&O premiums? A: Michael Rispoli, CFO: Howard's departure is reflected in our guidance, including investments in AI for efficiency. Any changes in D&O premiums are also accounted for in our projections.

Q: Can you provide insights into the growth and challenges of the data center sector? A: Barry Gosin, CEO: We handled nearly $17 billion in data centers last year and expect more growth. The sector benefits from reshoring, the CHIPS Act, and AI investments. While power issues exist, we're involved in power acquisition and other solutions, positioning us well to capture market share.

Q: Why was the forgivable loan spend low in Q4, and what are the expectations for 2025? A: Michael Rispoli, CFO: The fourth quarter is just a snapshot; we spent over $200 million for the year. We plan to continue investing at similar levels in 2025, focusing on employee loans or acquisitions based on the best returns.

Q: How might changes at the FHFA and Fannie/Freddie's ownership affect multifamily activity? A: Barry Gosin, CEO: Any privatization or changes would likely have minimal impact, with historical precedents showing only minor spread changes. We don't foresee significant changes soon.

Q: What is the outlook for capital markets and leasing in 2025? A: Barry Gosin, CEO: We expect double-digit growth in capital markets over the next two years, despite market headwinds. Leasing is supported by a return to office trends and limited new office space construction. Michael Rispoli, CFO, added that capital markets are expected to grow faster than the overall 9% revenue growth guidance, with leasing slightly slower.

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