Slide 1: Second Quarter 2022 Financial Results Presentation
SECOND QUARTER 2022 Newmark Group, Inc. Financial Results Presentation NEWMARK
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) Recent Acquisitions Newmark acquired three companies in the second quarter of 2022. For more information, please see the Company's investor relations website or the "Media" section of its main website for the press releases titled "Newmark Acquires
Slide 4: Highlights of Consolidated Results
1 Highlights of Consolidated Results HIGHLIGHTS OF CONSOLIDATED RESULTS ($ IN MILLIONS) 2Q22 2Q21 Change YTD 22 YTD 21 Change Revenues $755.4 $629.9 19.9% $1,433.6 $1,133.9 26.4% GAAP income before income taxes and noncontrolling interests ("GAAP pre-tax income") 80.2 727.4 (89.0)% 84.9 782.5 (89.1)
Slide 5: Leading Global Commercial Real Estate Services Provider
1 Leading Global Commercial Real Estate (“CRE”) Services Provider 6,500+* ~170 $3.2B ~$1T 55+ PROFESSIONALS CLIENT SERVICE ANNUAL REVENUES** TRANSACTION VOLUME** COMPANIES LOCATIONS* ACQUIRED, SINCE 2011 *Excluding business partners, we had over 6,200 employees in approximately 150 offices in 120 ci
Slide 6: Newmark is a Compelling Investment Opportunity
WHY INVEST IN NEWM ARK? Newmark is a Compelling Investment Opportunity Favorable long-term trends Fastest growth in the in $400B+ commercial real industry1 estate services industry Diversified business with Low risk intermediary with strength in key areas with strong financial position secular tailw
Slide 7: CRE Services is a Large and Highly Fragmented Global Market
CRE Services is a Large and Highly Fragmented Global Market 70% + of TAM is outside the U.S. $400B+ TOTAL TOP 10 CRE REMAINING GLOBAL TAM, ADDRESSABLE SERVICES 80%+ MARKET (“TAM”) FIRMS, < 20% TAM has increased ~70% since 2017 due to: - Overall industry growth - Largest firms expanding offerings - N
Slide 8: Fastest Growing CRE Services Firm Since 2011
Fastest Growing CRE Services Firm Since 2011 NEWMARK REVENUE GROWTH $3,500 $3,000 NEWMARK: 29% CAGR AVERAGE PEER: 18% CAGR 753 $2,500 ($ MILLIONS) $2,000 1,014 $1,500 $1,000 1,440 $500 230 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q2 TTM 2022 Organic Acquisitions Organic Growth - Acq
Slide 9: Strong Financial Position & Cash Generation Support Growth
Strong Financial Position & Cash Generation Support Growth1 $400 MM+ of Annual Cash Low Risk Intermediary Generated by the - Virtually no balance sheet risk1 Variable Cost Structure Business and growing2 - GSE/FHA portfolio provides - Over 70% of expenses are - $2.1 billion of AEBITDA and predictabl
Slide 10: 2Q 2022 Highlights
2Q 2022 Highlights $0.46 21.1% $755.4M $159.5M POST-TAX ADJUSTED REVENUES ADJUSTED EBITDA ADJUSTED EBITDA EPS MARGIN - Record second quarter total revenues of $755.4 million, up 19.9% - Best-ever second quarter revenues from management services, servicing fees, and other, which improved by 6.5% to $
Slide 11: Management Commentary on Business Trends
Management Commentary on Business Trends Revenue Category Near-Term Trends ‒ Structural review of office design and utilization creates significant opportunities for our flexible workspace business and for Global Corporate Services (“GCS”) ‒ Strong YTD growth in fee revenues and square feet managed
Slide 12: 2Q 2022 Revenue Performance
2Q 2022 Revenue Performance ($ IN MILLIONS) 2Q 2022 Revenue 2Q 2022 Revenue Composition1 Management services, servicing Leasing and other commissions Commercial fees, and other mortgage +6.5% origination, net 13% Management +15.4% services, servicing fees, and other 31% 233.7 212.8 219.5 Investment
Slide 13: Newmark Quarterly Volumes
1 Newmark ($ IN MILLIONS) Quarterly Volumes 2Q22 2Q21 % Change YTD 22 YTD 21 % Change TTM 2Q22 TTM 2Q21 % Change Investment Sales 26,066 16,434 58.6% 45,024 28,112 60.2% 104,922 58,417 79.6% Mortgage Brokerage 11,559 9,589 20.5% 21,753 13,965 55.8% 49,112 20,650 137.8% Total Capital Markets 37,625 2
Slide 14: Mortgage Servicing Provides Recurring, High-Margin Revenues
1 Mortgage Servicing Provides Recurring, High-Margin Revenues Servicing Portfolio Composition As of 6/30/2022 Fannie Mae/Freddie Mac Portfolio Maturities by Year 44.9% 38.0% Fannie Mae 37% Freddie Mac 32% 14.5% 2.6% FHA/Other Limited 8% 2022-23 2024-26 2027-29 2030+ Servicing 20% Special Servicing 3
Slide 15: Strong Balance Sheet & Credit Metrics
Strong Balance Sheet & Credit Metrics AS OF 6/30/2022 ($ IN MILLIONS) Credit Metrics as of Cash and Cash Equivalents (1) $280.5 6/30/2022 INTEREST RATE MATURITY $686.0 million TTM Adjusted EBITDA Senior Notes 6.125% 11/15/2023 $546.5 Credit Facility N/A 3/10/2025 - 0.4x Net Leverage Ratio3 Total Lon
Slide 16: Reiterating Outlook for 2022
1 Reiterating Outlook for 2022 Year-earlier Metric (in millions, except tax rate) Guidance Change YoY Prior Outlook Actual FY22 Total Revenues $2,906.4 $3,000 - $3,100 3% - 7% 3% - 7% FY22 Adjusted EBITDA $597.5 $620 - $650 4% - 9% 4% - 9% FY22 Adjusted Earnings Tax Rate 18.9% 17% - 19% N/A 17% - 19
Slide 17: Newmark is on Track to Continue Industry-Leading Growth
Newmark is on Track to Continue Industry-Leading Growth ($ IN MILLIONS) Total Revenue Adjusted EBITDA 11.5% CAGR 4,500 10.8% CAGR 16.2% CAGR 3,206 22.5% CAGR 900 2,906 687 597 1,596 265 2017 2021 TTM 2025 Target Midpoint 2017 2021 TTM 2025 Target 2Q22 2Q22 ‒ Newmark remains on track to meet its 2025
Slide 18: GAAP Financial Results
—— GAAP Financial Results
Slide 19: Condensed Consolidated Statements of Operations
1 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: 2022 2021 2022 2021 Management services, servicing fees and other $ 233,685 $ 219,509 $ 466,804 $ 407,2
Slide 20: Condensed Consolidated Statements of Operations (continued)
1 Newmark Group, Inc. Condensed Consolidated Statements of Operations (continued) (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Per share data: Basic earnings per share Net income available to common stockhold
Slide 21: Condensed Consolidated Balance Sheets
1 Newmark Group, Inc. Condensed Consolidated Balance Sheets (IN THOUSANDS) (UNAUDITED) (UNDER GAAP) June 30, 2022 December 31, 2021 Assets Current Assets: Cash and cash equivalents $ 280,468 $ 191,332 Restricted cash 74,694 75,168 Marketable securities - 524,569 Loans held for sale, at fair value 84
Slide 22: Summarized Condensed Consolidated Statements of Cash Flows
1 Newmark Group, Inc. Summarized Condensed Consolidated Statements of Cash Flows (IN THOUSANDS) (UNAUDITED) (UNDER GAAP) For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net cash provided by operating activities $ (163,121) $ 494,182 $ 339,034 $ 785,142 Net c
Slide 23: Appendix
Appendix
Slide 24: Fully Diluted Period-End Share Count Summary
1 Newmark Group, Inc. Fully Diluted Period-End Share Count Summary AS OF JUNE 30, 2022 Fully-Diluted Shares (millions) Ownership (%) Class A owned by Public 134.5 55% Limited partnership units owned by employees 1 33.5 14% Class A owned by employees 25.5 10% Other owned by employees 2 5.6 2% Partner
Slide 25: Newmark Has A Proven Track Record of Gaining Market Share
1 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
Slide 26: Projected Commercial Mortgage Maturities
Projected Commercial Mortgage Maturities $2.4 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 $2.4 trillion in commercia
Slide 27: Non-GAAP Definitions and Reconciliation Tables
Non-GAAP Definitions and Reconciliation Tables
Slide 28: Non-GAAP Financial Measures
3 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 m
Slide 29: Non-GAAP Financial Measures (continued)
X 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
Slide 30: 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 31: 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 32: 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 33: 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 34: 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 35: Reconciliation of GAAP Net Income to Adjusted Earnings
1 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, 2022 2021 20
Slide 36: Reconciliation of GAAP Net Income to Adjusted Earnings (continued)
1 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 End
Slide 37: Reconciliation of GAAP Net Income to Adjusted Earnings (continued)
1 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 and/or BGC
Slide 38: Reconciliation of GAAP Income to Adjusted EBITDA
1 Reconciliation of GAAP Income to Adjusted EBITDA (IN THOUSANDS) (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 GAAP net income available to common stockholders $ 48,519 $ 439,744 $ 48,881 $ 472,849 Adjustments: Net income attributable to noncontrolling intere
Slide 39: Liquidity Analysis Table
1 Liquidity Analysis Table (IN MILLIONS) (UNAUDITED) June 30, 2022 December 31, 2021 Cash and cash equivalents $ 280,468 $ 191,332 Marketable securities - 524,569 Repurchase agreements and securities loaned - (140,007) Total (1) $ 280,468 $ 575,894 (1) Undrawn availability on the Credit Facility was
Slide 40: Reconciliation of GAAP pre-tax income excluding Impact of Nasdaq
1 Reconciliation of “GAAP pre-tax income” to “GAAP pre-tax income excluding the Impact of Nasdaq” (IN THOUSANDS) (UNAUDITED) Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 GAAP income before income taxes and noncontrolling interests ("GAAP pre-tax income") 80,218 727,373 8
Slide 41: Other Income
1 Other Income ($ IN MILLIONS) 2Q22 2Q21 Change YTD 22 YTD 21 Change Nasdaq Impact $0.3 $1,085.3 (100.0)% ($87.4) $1,082.1 (108.1)% Mark-to-market gains on non-marketable investments, net (15.5) 2.5 (720.0)% (13.9) 2.5 (656.0)% Other items, net - (1.0) NMF - - NMF Other income (loss), net under GAAP
Slide 42: Media and Investor Contacts
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 investors@nmrk.com tw