Walker & Dunlop, Inc · NYSE:WD
Walker & Dunlop — Q1 2024 Earnings Presentation
17 slides from Walker & Dunlop's earnings presentation, May 2, 2024
Slide 1: Q1 2024 Earnings
Q1 Q1 2024 EARNINGS May 2, 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: The market experienced the lowest quarter of multifamily sales volume since Q2 2020
T H E M A R K E T E X P E R I E N C E D T H E L O W E S T Q U A RT E R O F M U LT I FA M I LY S A L E S V O L U M E S I N C E Q 2 2 0 2 0 U.S. Apartment Sales Volume (in billions) $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $- Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q
Slide 4: Solid total transaction volumes despite challenging market
S O L I D T O TA L T R A N S A C T I O N V O L U M E S D E S P I T E CHALLENGING MARKET Q1’24 Consolidated Key Performance Metrics Total Transaction Volume Total Revenues Diluted EPS (in millions) (in millions) $6,720 $239 $6,394 $228 $0.79 - 5% - 4% - 56% $0.35 Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 4
Slide 5: Adjusted EBITDA and adjusted core EPS growth reflect financial stability of business model
ADJUSTED EBITDA AND ADJUSTED CORE EPS GROWTH R E F L E C T F I N A N C I A L S TA B I L I T Y O F B U S I N E S S M O D E L Q1’24 Consolidated Key Performance Metrics Cont’d. Adjusted EBITDA1 Adjusted Core EPS2 (in thousands) $74,136 $1.19 $67,975 $1.17 +9% +2% Q1'23 Q1'24 Q1'23 Q1'24 5 1) This is a
Slide 6: Total transaction volume driven by strong debt brokerage platform
T O TA L T R A N S A C T I O N V O L U M E D R I V E N B Y S T R O N G D E B T B R O K E R A G E P L AT F O R M Total Transaction Volume (in millions) $3,500 $3,319 $3,000 $2,500 $2,364 $2,000 $1,895 $1,500 $1,359 $1,167 $976 $975 $1,000 $903 $500 $128 $14 $- $16 $- Fannie Mae Freddie Mac HUD Broker
Slide 7: Upcoming commercial real estate maturities driven by non-multifamily loans
U P C O M I N G C O M M E R C I A L R E A L E S TAT E M AT U R I T I E S D R I V E N B Y N O N - M U LT I FA M I LY L O A N S Total Commercial Real Estate Loan Maturities by Property Type1 Total Commercial Real Estate Loan Maturities by Investor Type1 (in billions) (in billions) $929 $929 $573 $573
Slide 8: Continued servicing portfolio growth drives strong cash generation
C O N T I N U E D S E RV I C I N G P O RT F O L I O G R O W T H D R I V E S S T R O N G C A S H G E N E R AT I O N > As of March 31, 2024, the servicing portfolio had a weighted average remaining life of 8.0 years and a weighted average servicing fee of 24.0 bps > Only $10.7 billion of Agency loans,
Slide 9: Capital Markets: Q1'24 key financial metrics year-over-year
C A P I TA L M A R K E T S Q1’24 KEY FINANCIAL METRICS YEAR-OVER-YEAR Q1’24 Q1’23 % Change (in thousands) Consolidated Total Transaction Volumes $6,394,459 $6,720,480 (5%) Total Revenues $81,897 $104,004 (21%) Net Income (Loss) ($6,700) $504 (1,429%) Adjusted EBITDA1 ($19,297) ($18,687) 3% • Decline
Slide 10: Servicing & Asset Management (SAM): Q1'24 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 ” ) Q1’24 KEY FINANCIAL METRICS YEAR-OVER-YEAR (in thousands) Q1’24 Q1’23 % Change Total Revenues $141,235 $133,196 6% Net Income $43,283 $51,084 (15%) Adjusted EBITDA1 $119,658 $112,975 6% • Ended Q1’24 with total managed portfolio of $149.
Slide 11: 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 Ratio1 >2x Underwritten Loan-to-Value2 61% Fixed-Rate Loans3 92% Defaulted Loans3 0.11% Delinquent Loans3 0.09% Maturi
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: Appendix
APPENDIX
Slide 14: 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 (in thousands) Three months ended March 31, 2024 Three months ended March 31, 2023 Walker & Dunlop Net Income $11,866 $26,665 Adjustments: Income tax expense 2,864 7,135 Intere
Slide 15: 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 (in thousands), except per share amounts Three months ended March 31, 2024 Three months ended March 31, 2023 Walker & Dunlop Net Income $11,866 $26,665 Adjustments: Provision (benefit) for credit losses 524 (10,775) Net write-offs — — Amortiza
Slide 16: 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 March 31, Three months ended March 31, (in thousands) 2024 2023 Walker & Dunlop Net Income (Loss) ($6,700) $504 Adjustments: Income tax expense (benefit) (1,744) 504 Interest expense o
Slide 17: 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 March 31. Three months ended March 31, (in thousands) 2024 2023 Walker & Dunlop Net Income $43,283 $51,084 Adjustments: Income tax expense 11,153 13,104 Interest expense on corporate debt 11,191 9