Slide 1: Third Quarter 2024 Financial Results Presentation
Newmark Group, Inc. (Nasdaq: NMRK) Third Quarter 2024 Financial Results Presentation November 5, 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 3Q24 3Q23 Change YTD 2024 YTD 2023 Change (USD millions, except per share data) Revenues $685.9 $616.3 11.3% $1,865.8 $1,722.9 8.3% GAAP income (loss) before income taxes and noncontrolling interests 33.2 22.5 47.4% 35.8 21.1 70.1% ("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 ~$2.6B ~$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: Third Quarter and YTD 2024 Highlights
Third Quarter and YTD 2024 Highlights Total Adjusted Adjusted Adjusted Revenues EPS EBITDA EBITDA Margin 3Q 2024 $686MM $0.33 $113MM 16% 11% 22.2% 17% 53bps YTD 2024 $1,866 $0.69 18% $262MM 118bps14% 8% 8% 16.9% 13% 49bps - Newmark's 11.3% quarterly revenue growth and strong operating leverage drove
Slide 7: 3Q 2024 Revenue Detail
3Q 2024 Revenue Detail Management services, servicing fees, and other Leasing & other commissions 11.4% $283 5.6% $215 $254 $203 Capital Markets 27.5% 3Q 2023 3Q 2024 3Q 2023 3Q 2024 41.2% 3Q 2024 Revenue Capital Markets Total Revenues by Business Management services, 18.5% 11.3% servicing fees, & o
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 09/30/2024 Newmark Fannie Mae/Freddie Mac Portfolio Maturities by Year 46.6% FHA/Other 4.4% 38.4% Fannie Mae 17.3% $179.1 Billion 10.6% Freddie Mac 14.3% Limited Servicing & 4.3% Special A
Slide 9: Strong Balance Sheet & Credit Metrics
Strong Balance Sheet & Credit Metrics No near term debt maturities due to the refinancing of our corporate debt AS OF 09/30/2024, UNLESS OTHERWISE STATED ($ IN MILLIONS) Cash and Cash Equivalents $178.6 Credit Metrics as of 09/30/2024 Interest Rate Maturity Senior Notes 7.50% 01/12/2029 $595.4 $428.
Slide 10: Strong Financial Position & Cash Generation
Strong Financial Position & Cash Generation Low Risk Strong Financial Profile & Strong Cash Flow Intermediary Credit Metrics – Capital-light model; we do not own real estate – Operates with investment grade credit metrics – Newmark has a history of strong Cash Flow Generation and Conversion3 – Virtu
Slide 11: Strong Growth in Recurring Revenues
Strong Growth in Recurring Revenues Provides Stable Base of Revenues ($ in millions) Pass through revenues Fees from management services, servicing, and other Our fees from these businesses have grown 16% & 18% respective 205% between 2017 and TTM. Total & Fee Revenue CAGRs 41% 39% $1,067 32% $971 $
Slide 12: Increasing Percentage of International Revenue
Increasing Percentage of International Revenue Newmark’s Non-U.S. Revenue 13.3% We continued to make progress towards 60% 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 13: Record Quantities of Debt Maturing in 2024-2028
Record Quantities of Debt Maturing in 2024-2028 ~$1T of Outstanding CRE Debt is Potentially Troubled, $529B of this is Maturing in 2024-20261 1000 U.S. Commercial Mortgage Maturities ($B) 900 ~$2T 800 700 Dollars in Billions 600 500 400 300 200 100 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Slide 14: Outlook & Targets
Outlook & Targets Property Type: Various NEWMARK 14
Slide 15: 2024 Outlook
2024 Outlook Metric Updated FY 2024 Outlook YoY Change Prior Outlook FY 2023 Actual Total Revenues (millions) $2,620 - $2,680 6% - 9% 3% - 7% $2,470.4 Adjusted Earnings Per Share $1.11 - $1.17 6% - 11% 5% - 9% $1.05 Adjusted Earnings Tax Rate 13% - 15% 15% - 18% 15.1% Adjusted EBITDA (millions) $410
Slide 16: 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 YTD 2024 Results ‒ Expect investments
Slide 17: GAAP Financial Results
GAAP Financial Results Property Type: Various NEWMARK 17
Slide 18: 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 September 30, Nine Months Ended September 30, Revenues: 2024 2023 2024 2023 Management services, servicing fees and other $ 282,623 $ 253,749 $ 802,33
Slide 19: 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 September 30, Nine Months Ended September 30, Per share data: 2024 2023 2024 2023 Basic earnings per share Net income available to common
Slide 20: Condensed Consolidated Balance Sheets
Newmark Group, Inc. Condensed Consolidated Balance Sheets (IN THOUSANDS) (UNAUDITED) (UNDER GAAP) September 30, 2024 December 31, 2023 Assets Current Assets: Cash and cash equivalents $ 178,583 $ 164,894 Restricted cash 105,755 93,812 Loans held for sale, at fair value 1,027,781 528,944 Receivables,
Slide 21: 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net cash provided by (used in) operating activities $ (85,245) $ 413,540 $ (412,513) $ (485,938)
Slide 22: Appendix 1: Additional Information on Newmark
Appendix 1: Additional Information on Newmark Property Type: Various NEWMARK 22
Slide 23: Newmark Volumes
Newmark Volumes ($ IN MILLIONS) 3Q 24 3Q 23 % Change YTD 2024 YTD 2023 % Change Fannie Mae 1,028 714 43.9% 2,781 1,991 39.6% Freddie Mac 1,070 931 14.9% 2,522 3,371 (25.2)% FHA / Other - - - - 16 (100.0)% Total Origination Volume 2,098 1,646 27.5% 5,302 5,378 (1.4)% Mortgage Brokerage and Debt Place
Slide 24: Newmark Has a 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 12.0% Billio
Slide 25: Fully Diluted Period-End Share Count Summary
Newmark Group, Inc. Fully Diluted Period-End Share Count Summary As of September 30, 2024 Fully Diluted Shares (millions) Ownership (%) Class A owned by Public 129.5 51.6% Limited partnership units owned by employees1 52.1 20.8% Class A owned by employees 17.4 7.0% Other owned by employees 5.5 2.2%
Slide 26: 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 27: 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 28: 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 presentation on the Company's investor relations website, as well as
Slide 29: Appendix 2: Additional Industry Information
Appendix 2: Additional Industry Information Property Type: Various NEWMARK 29
Slide 30: 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 81% 78% 77% 76% 73% 69% 69% 67% 64% 65% 52% 47% Freespace (Americas) SWAA* Placer.ai (U.S.) Kastle U.S. Freespace
Slide 31: U.S. Office Leasing Fundamentals Continued to Improve in 3Q24
U.S. Office Leasing Fundamentals Continued to Improve in 3Q24, Led by Higher-Quality Properties Office Leasing as a Percent of Inventory (% Change Y/Y) Total Office Square Feet Leased (% Change Y/Y) 4 & 5 Star 24.1% 3 Star 8.9% 6.5% 5.0% -1.6% -3.0% -3.0% -4.2% -6.5% -8.2% -11.3% -12.7% -13.6% -13.9
Slide 32: Appendix 3: Financial Tables & Reconciliations
Appendix 3: Financial Tables & Reconciliations Property Type: Various NEWMARK 32
Slide 33: 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 34: 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 35: 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 36: 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 37: 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 38: 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 39: 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 40: 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 41: 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 42: 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 September 30, Nine Months Ended September 30, 202
Slide 43: 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 September 30, Nine Months
Slide 44: 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 September 30, Nine Months
Slide 45: 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 GAAP net income (loss) available to
Slide 46: Other Income
Other Income (in Millions) (Unaudited) NEWMARK 46
Slide 47: Media and Investor Contacts
MEDIA CONTACT INVESTOR CONTAC 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 nmrk.com/servic