Slide 1: Second Quarter 2024 Financial Results Presentation
Newmark Group, Inc. (Nasdaq: NMRK) Second Quarter 2024 Financial Results Presentation August 2, 2024 Property Type: Various NMRK.COM
Slide 2: Disclaimers
Disclaimers Discussion of Forward-Looking Statements References in this document to “we,” “us,” “our,” the “Company” and “Newmark” mean Newmark Group, Inc., and its consolidated subsidiaries. Statements in this document regarding Newmark that are not historical facts are "forward-looking statements"
Slide 3: Recent Consolidated Results
Recent Consolidated Results HIGHLIGHTS OF CONSOLIDATED RESULTS 2Q24 2Q23 Change YTD 2024 YTD 2023 Change (USD millions, except per share data) Revenues $633.4 $585.8 8.1% $1,179.9 $1,106.6 6.6% GAAP income (loss) before income taxes and noncontrolling interests 32.5 17.9 80.9% 2.6 (1.5) 280.5% ("GAA
Slide 4: Leading Commercial Real Estate Advisor and Service Provider
Leading Commercial Real Estate Advisor and Service Provider TTM Revenues 2022 + 2023 Transaction Volume Professionals Global Client Service Locations ~$2.5B ~$1.7T ~7,800 ~170 Top Global Public Acclaimed Strong Earnings, Cash Generation CRE Services Companies Industry Leader & Low Leverage Top 3 U.S
Slide 5: Low Risk Real Estate Services Business with Diversified Revenue Base
Low Risk Real Estate Services Business with Diversified Revenue Base Leading CRE Services Platform Covering a Broad Geography Diversified Revenue Streams Revenues from “Management services, servicing fees, Increasingly diversified by region. The addition of Focused investments driving continued reve
Slide 6: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights1 $633.4MM $86.3MM $0.22 13.6% TOTAL ADJUSTED POST-TAX ADJUSTED REVENUES EBITDA ADJUSTED EBITDA EPS MARGIN - The Company's strong operating leverage drove an 18.3% increase in AEBITDA and 22.2% improvement in AEPS on 8.1% revenue growth. - 14.5% Capital markets revenue
Slide 7: 2Q 2024 Revenue Detail
2Q 2024 Revenue Detail Management services, servicing fees, and other Leasing & other commissions 9.2% 2.4% $204 $209 $263 $241 Capital Markets 25.6% 2Q 2023 2Q 2024 2Q 2023 2Q 2024 41.5% 2Q 2024 Revenue Total Revenues Capital Markets by Business Management services, 14.5% 8.1% servicing fees, & oth
Slide 8: Servicing & Asset Management Provides Long-term and Recurring, High-Margin Revenues
Servicing & Asset Management Provides Long-term and Recurring, High-Margin Revenues Portfolio Composition as of 06/30/2024 Newmark Fannie Mae/Freddie Mac Portfolio Maturities by Year 46% FHA/Other 5% 38% Fannie Mae 17% $175.4 Billion 11% Freddie Mac 14% 5% Limited Servicing & Special Asset Managemen
Slide 9: Strong Balance Sheet & Credit Metrics
Strong Balance Sheet & Credit Metrics No near term debt maturities due to the refinancing of our corporate debt AS OF 06/30/2024, UNLESS OTHERWISE STATED ($ IN MILLIONS) Cash and Cash Equivalents $176.4 Credit Metrics as of 06/30/2024 Interest Rate Maturity Senior Notes 7.50% 01/12/2029 $595.2 $412.
Slide 10: Strong Financial Position & Cash Generation
Strong Financial Position & Cash Generation Low Risk Strong Financial Profile & Strong Cash Flow Intermediary Credit Metrics – Capital-light model; we do not own real estate – Operates with investment grade credit metrics – Newmark has a history of strong Cash Flow Generation and Conversion 3 – Virt
Slide 11: Strong Growth in Recurring Revenues
Strong Growth in Recurring Revenues Provides Stable Base of Revenues ($ in millions) Pass through revenues Fees from management services, servicing, and other 17% & 18% respective Our fees from these businesses have Total & Fee grown 189% between 2017 and TTM. Revenue CAGRs 41% 39% $1,038 32% $971 $
Slide 12: Long-Term Track Record of Gaining Share in U.S. Capital Markets
Newmark Has a Long-Term Track Record of Gaining Share in U.S. Capital Markets (TTM figures exclude the Signature Transactions; NMRK’s figures shown below include only its U.S. volumes) NMRK Total Debt Volume NMRK Sales Volume NMRK Debt Market Share NMRK Investment Sales Market Share 100 12% Billions
Slide 13: Record Quantities of Debt Maturing in 2024-2028
Record Quantities of Debt Maturing in 2024-2028 $1.3T of Outstanding CRE Debt is Potentially Troubled, $670B of this is Maturing in 2024-20261 1000 U.S. Commercial Mortgage Maturities ($B) 900 ~$2T 800 700 Dollars in Billions 600 500 400 300 200 100 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 202
Slide 14: Distress Creates Demand for Commercial Real Estate Service Providers Like Newmark
Distress Creates Demand for Commercial Real Estate Service Providers Like Newmark Investment Sales Financing — Loan and REO-disposition and syndication — Sell-downs for loan portfolio acquirers — Loan acquisition financing — Equity recapitalizations — Debt restructuring and syndication — Loan Sales
Slide 15: Distress Creates Demand for CRE Service Providers (continued)
Distress Creates Demand for Commercial Real Estate Service Providers Like Newmark (continued) According to MSCI, the cumulative volume of troubled assets was up 26% relative to a year ago. Market distress should provide tailwinds across our service lines. 35 CRE Loan Sales Story Frequency1 32 New Pe
Slide 16: Outlook & Targets
Outlook & Targets Property Type: Various In Celebration of Newmark’s Recent Paris Expansion NEWMARK 16
Slide 17: 2024 Outlook
2024 Outlook1 Metric FY 2023 Actual Expected YoY Change (Except for Tax Rate) Total Revenues (millions) $2,470.4 3% to 7% Adjusted EBITDA (millions) $398.3 5% to 9% Adjusted Earnings Per Share $1.05 5% to 9% Adjusted Earnings Tax Rate 15.1% 15% to 18% ‒ Newmark reiterated its full year 2024 outlook.
Slide 18: Expect to Generate Record Revenue and Earnings When Industry Volumes Normalize
Expect to Generate Record Revenue and Earnings When Industry Volumes Normalize1 We anticipate strong incremental margins and target over $630 MM AEBITDA in 2026 Newmark invested for growth in $425 MM+ of Incremental Revenues Expect to Exceed Record 2021 2023 and 1Q 2024 Results ‒ Expect investments
Slide 19: GAAP Financial Results
GAAP Financial Results Property Type: Multifamily NEWMARK 19
Slide 20: 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 June 30, Six Months Ended June 30, Revenues: 2024 2023 2024 2023 Management services, servicing fees and other $ 262,778 $ 240,660 $ 519,712 $ 452,952
Slide 21: Condensed Consolidated Statements of Operations (continued)
Newmark Group, Inc. Condensed Consolidated Statements of Operations (continued) (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Per share data: Basic earnings per share Net income (loss) available to common stockholders $ 14,280 $ 6,429 $ (1,973) $ (3,921) Basic earnings per share $ 0
Slide 22: Condensed Consolidated Balance Sheets
Newmark Group, Inc. Condensed Consolidated Balance Sheets (IN THOUSANDS) (UNAUDITED) (UNDER GAAP) June 30, 2024 December 31, 2023 Assets Current Assets: Cash and cash equivalents $ 176,387 $ 164,894 Restricted cash 101,812 93,812 Loans held for sale, at fair value 818,993 528,944 Receivables, net 55
Slide 23: Summarized Condensed Consolidated Statements of Cash Flows
Newmark Group, Inc. Summarized Condensed Consolidated Statements of Cash Flows (IN THOUSANDS) (UNAUDITED) (UNDER GAAP) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net cash provided by (used in) operating activities $ (258,486) $ (500,638) $ (327,269) $ (899,478) Net cas
Slide 24: Appendix 1: Additional Information on Newmark
Appendix 1: Additional Information on Newmark Property Type: Office NEWMARK 24
Slide 25: Increasing Percentage of International Revenue
Increasing Percentage of International Revenue Newmark’s Non-U.S. Revenue 63% 13.4% We continued to make progress towards increasing international revenues. Revenue 12.5% CAGR With our recent international hires, we 7.1% expect to further increase our non-U.S. revenues over time. 4.5% 0.9% Our full
Slide 26: Newmark Volumes
Newmark Volumes ($ IN MILLIONS) 2Q 24 2Q 23 % Change YTD 2024 YTD 2023 % Change Fannie Mae 918 661 38.7% 1,753 1,277 37.3% Freddie Mac 895 2,063 (56.6)% 1,451 2,440 (40.5)% FHA / Other - 16 (100.0)% - 16 (100.0)% Total Origination Volume 1,813 2,740 (33.8)% 3,204 3,732 (14.2)% Mortgage Brokerage and
Slide 27: Fully Diluted Period-End Share Count Summary
Newmark Group, Inc. Fully Diluted Period-End Share Count Summary As of June 30, 2024 Fully Diluted Shares (millions) Ownership (%) Class A owned by Public 131.4 51.9% Limited partnership units owned by employees1 52.4 20.7% Class A owned by employees 19.0 7.5% Other owned by employees 4.1 1.6% Partn
Slide 28: Certain Revenue Terms Defined
Certain Revenue Terms Defined Fee and non-fee revenues The Company’s total revenues include certain Management services revenues that equal their related expenses. These revenues represent fully reimbursable compensation and non-compensation costs recorded as part of Newmark's Global Corporate Servi
Slide 29: Other Useful Information
Other Useful Information Signature Transactions The book value of the overall loan portfolio was approximately $60 billion when Newmark was retained as an advisor by the FDIC and approximately $53 billion when the Company began marketing the loans, while the completed transactions had a combined not
Slide 30: Other Useful Information (continued)
Other Useful Information (continued) Newmark and Industry Volumes and/or Data All industry volume figures are preliminary unless otherwise noted. Please see the accompanying supplemental Excel tables and quarterly financial results press release on the Company's investor relations website, as well a
Slide 31: Appendix 2: Additional Industry Information
Appendix 2: Additional Industry Information Property Type: Industrial NEWMARK 31
Slide 32: Return to Workplace Continues to Improve Year-Over-Year
Return to Workplace Continues to Improve Year-Over-Year While workplace utilization has not reached pre-pandemic levels, year-over-year change suggests improvement As a % of 2019 levels 83% 78% 79% 77% 76% 73% 69% 67% 64% 61% 52% 50% Freespace (Americas) SWAA* Placer.ai (U.S.) Kastle U.S. Freespace
Slide 33: CRE Industry Fundamentals Expected to Remain Solid, led by Industrial
CRE Industry Fundamentals Expected to Remain Solid, led by Industrial Property Types Green Street Net Operating Income & Market Rental Revenue Per Available Foot : Baseline Forecast 2024 - 2028 CAGR 12.0% 10.1% 10.0% 8.4% 8.0% 6.5% 5.9% 6.0% 5.3% 4.7% 4.6% 4.5% 4.7% 3.9% 3.9% 3.7% 3.8% 3.9% 4.0% 3.2
Slide 34: Monumental Growth in Domestic Manufacturing is Underway
Monumental Growth in Domestic Manufacturing is Underway Since 2020, $530+ billion has been pledged towards Industrial Investments, Creating 210,000+ jobs in the process U.S. Major Manufacturing Announcements, 2020-2023 Seattle- Tacoma Los Angeles- Long Beach Mia mi - Spending on manufacturing constr
Slide 35: Appendix 3: Financial Tables & Reconciliations
Appendix 3: Financial Tables & Reconciliations Property Type: Office NEWMARK 35
Slide 36: 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 37: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) - Charges with respect to preferred units. Any preferred units would not be included in the Company’s fully diluted share count because they cannot be made exchangeable into shares of common stock and are entitled only to a fixed distribution. Preferred units
Slide 38: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Excluded Compensation-Related Items with Respect to the 2021 Equity Event under Adjusted Earnings and Adjusted EBITDA Newmark does not view the cash GAAP compensation charges related to 2021 Equity Event (the "Impact of the 2021 Equity Event") as being reflect
Slide 39: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Calculation of Other income (loss) for Adjusted Earnings and Adjusted EBITDA Adjusted Earnings calculations also exclude certain other non-cash, non-dilutive, and/or non-economic items, which may in some periods include: – Unusual, non-ordinary or non-recurrin
Slide 40: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) METHODOLOGY FOR CALCULATING ADJUSTED EARNINGS TAXES Although Adjusted Earnings are calculated on a pre-tax basis, Newmark also reports post-tax Adjusted Earnings to fully diluted shareholders. The Company defines post-tax Adjusted Earnings to fully diluted sha
Slide 41: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) The share count for Adjusted Earnings excludes certain shares and share equivalents expected to be issued in future periods but not yet eligible to receive dividends and/or distributions. Each quarter, the dividend payable to Newmark’s stockholders, if any, is
Slide 42: 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 43: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) MANAGEMENT RATIONALE FOR USING ADJUSTED EBITDA Newmark’s calculation of Adjusted EBITDA excludes certain items discussed above because they are either non-cash in nature, because the anticipated benefits from the expenditures are not expected to be fully reali
Slide 44: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) - Certain equity-based compensation charges that may be determined at the discretion of management. - Unusual, non-ordinary, or non-recurring items. - The impact of gains or losses on certain marketable securities, as well as any gains or losses related to ass
Slide 45: Reconciliation of GAAP Net Income to Adjusted Earnings
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 June 30, Six Months Ended June 30, 2024 2023 2024
Slide 46: 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) GAAP Net loss available to common stockholde
Slide 47: 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 June 30, Six Months Ended
Slide 48: Reconciliation of GAAP Income to Adjusted EBITDA
Reconciliation of GAAP Income to Adjusted EBITDA (in Thousands) (Unaudited) NEWMARK GROUP, INC. Reconciliation of GAAP Income (Loss) to Adjusted EBITDA (in thousands) (unaudited) Three Months Ended June 30, Three Months Ended June 30, 2024 2023 2024 2023 GAAP net income (loss) available to common st
Slide 49: Other Income
Other Income (in Millions) (Unaudited) NEWMARK 49
Slide 50: Media and Investor Contacts
M E D IA C ON T AC T IN V E S T OR C ON T AC T Find out more about Newmark For additional insights from Newmark Research, at the following sites: please go to the following websites: Deb Bergman Jason McGruder t 303-260-4307 nmrk.com nmrk.com/insights Shaun French t 212-829-7124 twitter.com/newmark