Newmark Group, Inc. · NASDAQ:NMRK
Newmark — Q1 2022 Earnings Presentation
40 slides from Newmark's earnings presentation, Apr 29, 2022
Slide 1: Newmark Group, Inc. Financial Results Presentation
FIRST QUARTER 2022 Newmark Group, Inc. Financial Results Presentation
Slide 2: Disclaimer and Other Useful Information
Disclaimer and Other Useful Information Forward-Looking Statements Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking
Slide 3: Disclaimer and Other Useful Information (continued)
Disclaimer and Other Useful Information (continued) Industry Volumes Newmark’s investment sales figures include investment sales and equity advisory transactions, while mortgage brokerage figures include the Company’s non-originated debt placement transactions, all measured in notional terms. Fannie
Slide 4: Highlights of Consolidated Results
Highlights of Consolidated Results HIGHLIGHTS OF CONSOLIDATED RESULTS ($ IN MILLIONS) 1Q22 1Q21 Change Revenues $678.2 $504.0 34.6% GAAP income before income taxes and noncontrolling interests ("GAAP pre- 4.7 55.2 (91.4)% tax income") GAAP pre-tax income excluding the Impact of Nasdaq 92.3 58.4 58.2
Slide 5: Global Reach | Newmark By The Numbers
N E WM ARK O V E R VI EW Global Reach | Newmark By The Numbers Newmark’s company-owned offices and business partners as of March 31, 2022 (except as noted) ~6,300* ~170 $3.1B $151.2B 50+ PROFESSIONALS CLIENT SERVICE ANNUAL REVENUES** CAPITAL MARKETS AND COMPANIES LOCATIONS* ORIGINATION VOLUME** ACQU
Slide 6: 1Q 2022 Highlights
1Q 2022 Highlights $126.5M $0.36 18.7% $678.2M ADJUSTED POST-TAX ADJUSTED REVENUES EBITDA ADJUSTED EBITDA EPS MARGIN - Record first quarter total revenues of $678.2 million, up 34.6% - Highest-ever first quarter Adjusted EBITDA of $126.5 million, up 64.5% - Best-ever first quarter revenues from mana
Slide 7: Management Commentary on Business Trends
Management Commentary on Business Trends Revenue Category Near-Term Trends ‒ Return to office and structural review of office design and utilization creates significant opportunities for our flexible workspace business and for Global Corporate Services (“GCS”) Management Services, ‒ Strong growth in
Slide 8: 1Q 2022 Revenue Performance
1Q 2022 Revenue Performance ($ IN MILLIONS) 1Q 2022 Revenue 1Q 2022 Revenue Composition1 Commercial mortgage origination, net Management services, Leasing and other 14% Management servicing fees, and other commissions services, servicing fees, and other +24.2% 34% +34.9% Investment Sales 22% Leasing
Slide 9: Newmark Quarterly Volumes
Newmark Quarterly Volumes ($ IN MILLIONS) 1Q22 1Q21 % Change Investment Sales 18,958 11,678 62.3% Mortgage Brokerage 10,194 4,376 132.9% Total Capital Markets 29,152 16,054 81.6% Fannie Mae 1,028 711 44.5% Freddie Mac 767 1,388 (44.7)% FHA / Other 48 14 239.2% Total Origination Volume 1,843 2,113 (1
Slide 10: Mortgage Servicing Provides Recurring, High-Margin Revenues
Mortgage Servicing Provides Recurring, High-Margin Revenues Servicing Portfolio Composition As of 3/31/2022 GSE Portfolio Maturities by Year Special Servicing 3% 45.3% Limited Servicing 25.9% Freddie Mac 20% 21.7% 33% FHA/Other 8% 7.1% 2022-23 2024-26 2027-29 2030+ Fannie Mae 37% ‒ Newmark’s ~$71 bi
Slide 11: Strong Balance Sheet & Access to Capital
Strong Balance Sheet & Access to Capital ($ in millions) Credit Metrics as of As of 3/31/2022 3/31/2022 Cash and Cash Equivalents $442.8 $126.5mm Adjusted EBITDA Interest Rate Maturity Senior Notes 6.125% 11/15/2023 $545.9 0.2x Credit Facility (1) N/A 3/10/2025 (3.4) Net Leverage Ratio Net Debt/Adju
Slide 12: Cumulative Nasdaq GAAP Gains from June 30, 2021 through 1Q2022
Cumulative Nasdaq GAAP Gains1 from June 30, 2021 through 1Q20222 ($ IN MILLIONS) As of March 31, 2022 Effective Price $175.80 $181.07 $198.18 $170.12 $180.66 per Share3: ‒ Between 6/30/21 and 3/31/2022, Newmark sold 100% of its Nasdaq shares for an effective average price of $180.66 per share, resul
Slide 13: Total Nasdaq-related Proceeds Are Nearly $1.5 Billion
Total Nasdaq-related Proceeds Are Nearly $1.5 Billion NEWMARK'S NASDAQ EARNINGS ARE 74% ABOVE VALUE AT IPO ($ IN MILLIONS) 1,600 1,474 1,400 628 1,200 1,000 800 847 847 600 400 200 0 9/30/2017 3/31/2022 Value as of IPO date (1) Additional GAAP Gain (2) ‒ In our 2017 IPO filings, we expected to recei
Slide 14: Outlook for 2022
Outlook for 2022 2021 2022 Metric (in millions, except tax rate) Guidance % Change YoY Actual FY Total Revenues $2,906.4 $3,000 - $3,100 3%-7% FY Adjusted EBITDA $597.5 $620 – $650 4%-9% FY Adjusted Earnings Tax Rate 18.9% 17% - 19% Fully Diluted Weighted Average Share Count for Adjusted 264.0 (2%-3
Slide 15: Newmark Remains on Track to Continue Strong Record of Growth
Newmark Remains on Track to Continue Strong Record of Growth REVENUE GROWTH SINCE IPO ($ IN MILLIONS) ADJUSTED EBITDA GROWTH SINCE IPO ($ IN MILLIONS) 5,000 1,000 5,000 5,000 1,000 4,500 4,500 4,500 900 4,500 4,500 13.8% CAGR 900 16.4% CAGR 4,500 900 4,000 800 900 4,000 4,000 800 3,500 3,500 13.8% C
Slide 16: GAAP Financial Results
GAAP Financial Results
Slide 17: Condensed Consolidated Statements of Operations
Newmark Group, Inc. Condensed Consolidated Statements of Operations (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended March 31, Revenues: 2022 2021 Management services, servicing fees and other $ 233,120 $ 187,750 Leasing and other commissions 198,952 147,433 Investme
Slide 18: Condensed Consolidated Statements of Operations (continued)
Newmark Group, Inc. Condensed Consolidated Statements of Operations (continued) (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended March 31, Per share data: 2022 2021 Basic earnings per share Net income available to common stockholders (1) $ 362 $ 31,464 Basic earnings
Slide 19: Condensed Consolidated Balance Sheets
Newmark Group, Inc. Condensed Consolidated Balance Sheets (IN THOUSANDS) (UNAUDITED) (UNDER GAAP) December 31, March 31, 2022 2021 Assets Current Assets: Cash and cash equivalents $ 442,791 $ 191,332 Restricted cash 75,168 75,168 Marketable securities - 524,569 Loans held for sale, at fair value 572
Slide 20: Summarized Condensed Consolidated Statements of Cash Flows
Newmark Group, Inc. Summarized Condensed Consolidated Statements of Cash Flows (IN THOUSANDS) (UNAUDITED) (UNDER GAAP) For the Three Months Ended March 31, 2022 2021 Net cash provided by operating activities $ 502,155 $ 290,960 Net cash provided by (used in) investing activities 426,796 (9,783) Net
Slide 21: Appendix
Appendix
Slide 22: Fully Diluted Period-End Share Count Summary
Newmark Group, Inc. Fully Diluted Period-End Share Count Summary As of March 31, 2022 Fully-Diluted Shares (millions) Ownership (%) Class A owned by Public 143.6 57% 1 Limited partnership units owned by employees 30.9 12% Class A owned by employees 25.0 10% Other owned by employees2 8.1 3% Partnersh
Slide 23: Newmark Has A Proven Track Record of Gaining Market Share
Newmark Has A Proven Track Record of Gaining Market Share NMRK Total Debt Volume NMRK Investment Sales Volume NMRK Debt Market Share NMRK Investment Sales Market Share $120 12% $100 10% Newmark Transaction Volume ($Bn) Newmark Market Share (%) $80 8% $60 6% $40 4% $20 2% $0 0% 2015 2016 2017 2018 20
Slide 24: Projected Commercial Mortgage Maturities
Projected Commercial Mortgage Maturities $2.3 TRILLION $600 $500 $400 $ IN BILLIONS $300 $200 $100 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Banks CMBS Life Cos GSE Other ‒ More than $2.3 trillion in commercia
Slide 25: Non-GAAP Definitions and Reconciliation Tables
Non-GAAP Definitions and Reconciliation Tables
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures This document contains non-GAAP financial measures that differ from the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United States ("GAAP"). Non-GAAP financial mea
Slide 27: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) The amount of certain quarterly equity-based compensation charges is based upon the Company’s estimate of such expected charges during the annual period, as described further below under “Methodology for Calculating Adjusted Earnings Taxes”. Virtually all of N
Slide 28: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Calculation of Non-Compensation Expense Adjustments for Adjusted Earnings Newmark's calculation of pre-tax Adjusted Earnings excludes non-cash GAAP charges related to the following: – Amortization of intangibles with respect to acquisitions. – Amortization of
Slide 29: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) – Realized gains related to the accelerated receipt on June 25, 2021 of Nasdaq shares. – Realized gains or losses and unrealized mark-to-market gains or losses with respect to Nasdaq shares received prior to the Earn-out acceleration. – The impact of any unrea
Slide 30: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Calculations of Pre- and Post-Tax Adjusted Earnings per Share Newmark’s pre-tax Adjusted Earnings and post-tax Adjusted Earnings per share calculations assume either that: – The fully diluted share count includes the shares related to any dilutive instruments,
Slide 31: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Adjusted EBITDA Defined Newmark also provides an additional non-GAAP financial performance measure, "Adjusted EBITDA", which it defines as GAAP "Net income (loss) available to common stockholders", adjusted for the following items: – Net income (loss) attribut
Slide 32: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Timing of Outlook for Certain GAAP and Non-GAAP Items Newmark anticipates providing forward-looking guidance for GAAP revenues and for certain non-GAAP measures from time to time. However, the Company does not anticipate providing an outlook for other GAAP res
Slide 33: Reconciliation of GAAP Net Income to Adjusted Earnings and Post-Tax Adjusted EPS
Reconciliation of GAAP Net Income Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests And Taxes And GAAP Fully Diluted EPS to Post-Tax Adjusted EPS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended March 31, 2022 2021 GAAP net income available to
Slide 34: Reconciliation of GAAP Net Income to Adjusted Earnings (continued)
Reconciliation of GAAP Net Income Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests And Taxes And GAAP Fully Diluted EPS to Post-Tax Adjusted EPS (continued) (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (CONTINUED) Three Months Ended March 31, 2022 2021 GAAP
Slide 35: Reconciliation of GAAP Net Income to Adjusted Earnings (continued)
Reconciliation of GAAP Net Income Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests And Taxes And GAAP Fully Diluted EPS to Post-Tax Adjusted EPS (continued) (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (CONTINUED) (2) Primarily represents Cantor’s pro-rata p
Slide 36: Reconciliation of GAAP Income to Adjusted EBITDA
Reconciliation of GAAP Income to Adjusted EBITDA (IN THOUSANDS) (UNAUDITED) Three Months Ended March 31, 2022 2021 GAAP net income available to common stockholders $ 362 $ 33,105 Adjustments: Net income attributable to noncontrolling interests(1) 352 11,473 Provision for income taxes 4,004 10,579 (2
Slide 37: Liquidity Analysis Table
Liquidity Analysis Table (IN MILLIONS) (UNAUDITED) March 31, 2022 Cash and cash equivalents $ 442,791 Marketable securities - Repurchase agreements and securities loaned - (1) Total $ 442,791 (1) Undrawn availability on the Credit Facility was $600.0 million and $465.0 million as of March 31, 2022 a
Slide 38: Reconciliation of GAAP pre-tax income excluding the Impact of Nasdaq
Reconciliation of “GAAP pre-tax income” to “GAAP pre-tax income excluding the Impact of Nasdaq” (IN THOUSANDS) (UNAUDITED) Three months ended March 31, 2022 2021 GAAP Income before income taxes and noncontrolling Interests ("GAAP pre-tax income") $ 4,718 $ 55,157 Impact of Nasdaq (gain) loss 87,621
Slide 39: Other Income
Other Income ( $ IN M ILLIO NS) 1Q22 1Q21 Nasdaq Impact ($87.6) ($3.2) Mark-to-market gains on non-marketable investments, net 1.6 - Other items, net - 1.0 Other income (loss), net under GAAP (86.0) (2.2) Exclude: Nasdaq Impact 87.6 5.6 Mark-to-market gains on non-marketable investments, net (1.6) -
Slide 40: Find out more about Newmark at the following sites
MEDIA CO NT ACT INVEST O R CO NT ACT Find out more about Newmark For additional insights from Newmark Research, at the following sites: please go to the following websites: Karen Laureano-Rikardsen Jason McGruder t 212-829-7124 nmrk.com nmrk.com/insights Chief Marketing Officer t 212-829-4975 invest