Walker & Dunlop, Inc · NYSE:WD
Walker & Dunlop — Q4 2023 Earnings Presentation
18 slides from Walker & Dunlop's earnings presentation, Feb 15, 2024
Slide 1: Q4 and Full Year 2023 Earnings
Q4 Q4 AND FULL YEAR 2023 EARNINGS February 15, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the statements contained in this presentation may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, anticipated events or trends and similar
Slide 3: Q4'23 Consolidated Key Performance Metrics
S O L I D F O U RT H Q U A RT E R F I N A N C I A L R E S U LT S Q4’23 Consolidated Key Performance Metrics Total Transaction Volume Total Revenues Diluted EPS (in millions) (in thousands) $11,210 $282,850 $1.24 $9,299 $274,336 $0.93 - 17% - 3% - 25% Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 3
Slide 4: Q4'23 Consolidated Key Performance Metrics Cont'd.
S O L I D F O U RT H Q U A RT E R F I N A N C I A L R E S U LT S Q4’23 Consolidated Key Performance Metrics Cont’d. Adjusted EBITDA1 Adjusted Core EPS2 (in thousands) $92,625 $87,582 $1.42 $1.41 - 5% +1% Q4'22 Q4'23 Q4'22 Q4'23 4 1) This is a non-GAAP financial measure. For a reconciliation of the m
Slide 5: 10-Year Treasury Volatility Has Disrupted Transaction Activity
1 0 - Y E A R T R E A S U R Y V O L AT I L T Y H A S D I S R U P T E D TRANSACTION ACTIVITY (volume in billions) 6.00% $30 $27.1 5.00% $25 $22.5 4.00% $20 3.00% $16.9 $15 $12.7 2.00% $11.2 $9.3 $10 $8.4 $8.6 $6.7 1.00% $5 0.00% $- WD Transaction Volume 10-Year U.S. Treasury Rate 5 Source: Federal Re
Slide 6: Capital Markets Q4'23 Key Financial Metrics Year-over-Year
C A P I TA L M A R K E T S Q4’23 KEY FINANCIAL METRICS YEAR-OVER-YEAR Q4’23 Q4’22 % Change (in thousands) Consolidated Total Transaction Volumes $9,299,231 $11,209,703 (17%) Total Revenues $129,081 $135,859 (5%) Net Income $17,519 $30,475 (43%) Adjusted EBITDA1 ($1,608) $6,411 (125%) • Decline in to
Slide 7: Servicing & Asset Management Q4'23 Key Financial Metrics
S E RV I C I N G & A S S E T M A N A G E M E N T ( “ S A M ” ) Q4’23 KEY FINANCIAL METRICS YEAR-OVER-YEAR (in thousands) Q4’23 Q4’22 % Change Total Revenues $139,667 $146,660 (5%) Net Income $34,071 $51,059 (33)% Adjusted EBITDA1 $110,543 $114,541 (3%) • Ended Q4’23 with total managed portfolio of $
Slide 8: W&D's At-Risk Portfolio Maintains Strong Credit Fundamentals
W & D ’ S AT - R I S K P O R T F O L I O M A I N T A I N S S T R O N G C R E D I T F U N D A M E N TA L S At-Risk Servicing Portfolio — Key Credit Metrics WAVG Debt Service Coverage Ratio >2x Underwritten Loan-to-Value1 61% Defaulted Loans2 0.05% Delinquent Loans2 0.12% Maturities Over Next 24 Month
Slide 9: Recurring Revenues Support Results Despite Market Challenges
R E C U R R I N G R E V E N U E S S U P P O RT 2 0 2 3 R E S U LT S DESPITE MARKET CHALLENGES 2023 Consolidated Key Performance Metrics Total Transaction Volumes Total Revenues Adjusted EBITDA1 (in millions) (in thousands) (in thousands) $63,339 $325,095 $1,258,753 $1,054,440 $300,123 $32,987 - 48%
Slide 10: Established Track Record of Dividend Growth
E S TA B L I S H E D T R A C K R E C O R D O F D I V I D E N D G R O W T H Quarterly Dividend1 $0.70 $0.65 $0.62 $0.60 $0.60 $0.50 $0.50 $0.40 $0.36 $0.30 $0.30 $0.25 $0.20 $0.10 $0.00 2018 2019 2020 2021 2022 2023 Q1'24 10 1) 2018-2023 dividends paid out in Q1-Q4 of each year; Q1'24 dividend of $0.
Slide 11: Long-Term Opportunity for Increased Multifamily Lending Activity
L O N G - T E R M O P P O RT U N I T Y F O R I N C R E A S E D M U LT I FA M I LY L E N D I N G A C T I V I T Y Forecast Multifamily Loan Maturities1 Forecast Multifamily Construction Completions2 Forecast Multifamily Loan Originations1 (in billions) (units n thousands) (in billions) 550 $404 $257 5
Slide 12: Full-Year 2024 Financial Outlook
FULL-YEAR 2024 FINANCIAL OUTLOOK 2023 ACTUAL 2024 GROWTH OUTLOOK MID SINGLE-DIGITS TO Diluted Earnings Per Share - 50% LOW TEENS MID SINGLE-DIGITS TO Adjusted Core Earnings Per Share - 16% LOW TEENS MID SINGLE-DIGITS TO Adjusted EBITDA - 8% LOW TEENS 2024 Financial Outlook is based on Walker & Dunlo
Slide 13: Total Shareholder Return
TOTAL SHAREHOLDER RETURN Commercial Real Estate Lenders, Services, and Technology Companies AS OF 12/31/2023 Cushman Newmark JLL Marcus&® CBRE CoStar Arbor Colliers Walker & Millichap Dunlop 1YR (13.3%) 39.9% 18.5% 28.8% 21.0% 13.1% 30.2% 35.0% 45.9% 5YR (25.4%) 49.0% 50.1% 33.7% 132.5% 159.1% 145.9
Slide 14: Appendix
APPENDIX
Slide 15: Consolidated Adjusted EBITDA Reconciliation to Consolidated Net Income
C O N S O L I D AT E D A D J U S T E D E B I T D A R E C O N C I L I A T I O N T O C O N S O L I D AT E D N E T I N C O M E Three months ended Three months ended Three months ended Year ended December 31, Year ended December 31, (in thousands) December 31, 2023 March 31, 2023 December 31, 2022 2023
Slide 16: Adjusted Core EPS Reconciliation
A D J U S T E D C O R E E P S R E C O N C I L I AT I O N Three months ended Three months ended December (in thousands), except per share amounts Year ended December 31, 2023 Year ended December 31, 2022 December 31, 2023 31, 2022 Walker & Dunlop Net Income $31,599 $41,492 $107,357 $213,820 Adjustmen
Slide 17: Adjusted EBITDA Reconciliation to Net Income by Segment: Capital Markets
A D J U S T E D E B I T D A R E C O N C I L I AT I O N T O NET INCOME BY SEGMENT Capital Markets Three months ended December Three months ended December (in thousands) 31, 2023 31, 2022 Walker & Dunlop Net Income $17,519 $30,475 Adjustments: Income tax expense 6,362 (1,070) Interest expense on corpo
Slide 18: Adjusted EBITDA Reconciliation to Net Income by Segment: SAM
A D J U S T E D E B I T D A R E C O N C I L I AT I O N T O NET INCOME BY SEGMENT SAM Three months ended December Three months ended December 31, (in thousands) 31. 2023 2022 Walker & Dunlop Net Income $34,071 $51,059 Adjustments: Income tax expense 11,269 3,209 Interest expense on corporate debt 11,