Newmark (NMRK) Q2 Revenue Jumps 20%

Key Points

• Non-GAAP EPS of $0.31 beat the $0.25 estimate and rose 40.9 % year over year.

• Revenue (GAAP) came in at $759.1 million, up 19.9% (GAAP) and $67.7 million (GAAP) ahead of estimates.

• Full-year 2025 (FY2025) guidance for revenue, adjusted EPS (non-GAAP), and adjusted EBITDA (non-GAAP) was increased.

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Newmark Group (NASDAQ:NMRK), a leading commercial real estate advisory and services firm, reported earnings on July 30, 2025. The company delivered results that topped analyst expectations on both earnings and revenue, with non-GAAP earnings per share (EPS) at $0.31 versus a $0.25 estimate, and GAAP revenue of $759.1 million compared to a $691.4 million consensus. Both figures marked double-digit growth rates from the same period last year. Management also raised its full-year 2025 guidance on the strength of continued gains across all core business lines. Overall, The quarter was notable for organic growth, strong capital markets activity, and higher operating profits, while adjusted earnings and cash generation improved substantially compared to the prior year.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Company Overview and Key Success Factors

Newmark Group is a commercial real estate services firm known for its advisory, leasing, capital markets, and property management services. It serves a wide range of clients, including property owners, developers, investors, and major corporations. The company operates from over 160 offices on four continents and employs more than 8,400 professionals.

Recent areas of focus for Newmark include technology integration, strengthening of client relationships, and global expansion. It invests heavily in digital solutions such as artificial intelligence (AI) and data analytics to offer clients real-time insights and improve execution quality. Other priorities include talent recruitment and managing its balance sheet conservatively, while growing recurring fee-based revenue streams like management services and servicing fees. The company considers the alignment of employee and shareholder interests through ownership important for talent retention and long-term success.

Quarterly Highlights and Segment Performance

Newmark posted double-digit revenue growth across all key business segments, with every increase attributed to organic expansion. Management services, servicing fees, and other recurring revenue businesses grew by 13.6%, marking their eighth straight quarter of year-over-year gains. This was driven by a 30% jump in the valuation and advisory group and steady growth in the asset management platform.

The leasing and other commissions segment climbed 13.8%, supported by a rebound in office and retail leasing in major U.S. metropolitan centers such as New York and San Francisco. High-profile lease transactions in both office and retail segments contributed to these results.

The capital markets segment -- which includes investment sales, commercial mortgage origination, and debt placement -- delivered standout growth. Revenue rose 37.9% (GAAP) as commercial mortgage origination fees nearly doubled and investment sales increased 16.2%. Data from industry sources showed that Newmark outpaced the broader U.S. market, which saw originations rise 38% and investment sales increase about 11%; Newmark's own growth rates far surpassed these industry averages. Notable deals included a $7.1 billion AI data center construction loan and other significant transactions.

Expense controls were a key theme, with non-compensation expenses under GAAP rising just 3.1%, much less than the 19.9% increase in total revenues. Compensation costs increased in line with revenue, though GAAP equity-based compensation saw a sharp temporary jump of 136.0% due to a one-time executive transition charge. Adjusted EBITDA margin improved, reflecting stronger profitability on higher sales volumes. Operating cash flow also strengthened, and adjusted free cash flow rose to $95.9 million, up from $38.7 million in Q2 2024.

The company maintained a strong balance sheet, ending the period with cash and equivalents of $195.8 million and a net leverage ratio of 1.4 times adjusted EBITDA. Newmark spent $125.5 million to buy back 10.8 million shares and declared a quarterly dividend of $0.03 per share, unchanged from prior quarters. There is $246.4 million remaining under the share repurchase program.

Looking Ahead: Guidance and Operational Priorities

Management raised its outlook for FY2025, now expecting total revenue of $3.05 billion to $3.25 billion, and adjusted EPS of $1.47 to $1.57. This compares to its previous forecast of $2.90 billion to $3.10 billion in revenue and $1.40 to $1.50 in adjusted EPS. The company expects adjusted EBITDA of $523 million to $573 million, up from earlier guidance of $495 million to $545 million. The adjusted tax rate is forecast to remain between 14% and 16%.

Management continues to favor selective hiring of top teams and professionals over large-scale mergers or acquisitions, aiming for gradual annual share count increases of 2% or less. The company expects equity-based compensation for 2025 to be slightly above its long-term target, mainly due to one-time charges related to the exit of the former Executive Chairman.

NMRK does pay a dividend. The quarterly dividend was maintained at $0.03 per share for the current period.

Investors should watch for changes in debt levels, compensation costs, and market conditions in capital markets and leasing. While recent results have been strong, Newmark’s outperformance will require sustained momentum as competitive and macroeconomic dynamics continue to shift. Management did not note any other material one-time events aside from the previously disclosed executive transition charges in equity compensation.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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