Walker & Dunlop, Inc · NYSE:WD
Walker & Dunlop — Q3 2023 Earnings Presentation
18 slides from Walker & Dunlop's earnings presentation, Nov 9, 2023
Slide 1: Third Quarter 2023 Earnings
Q3 THIRD QUARTER 2023 EARNINGS November 9, 2023
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: W&D Adjusted Core EPS and Adjusted EBITDA Outperforms Majority of Peer Set
W&D ADJUSTED CORE EPS AND ADJUSTED EBITDA OUTPERFORMS MAJORITY OF PEER SET Q3 change1 WD JLL CBRE NMRK CIGI CWK MMI Total Revenues (15%) (1%) 4% (7%) (5%) (9%) (50%) Adjusted EPS2 (21%) (41%) (36%) (23%) (16%) (51%) N/A Adjusted EBITDA3 (1%) (26%) (28%) (22%) 0% (26%) (119%) YTD 2023 change4 WD JLL
Slide 4: Financial Performance Bolstered by Recurring Revenues
FINANCIAL PERFORMANCE BOLSTERED BY RECURRING REVENUES Q3’23 Consolidated Key Performance Metrics Total Transaction Volume Total Revenues Adjusted EBITDA1 (in millions) (in thousands) (in thousands) $16,919 $315,611 $74,990 $74,065 $268,743 $8,555 Q3'22 Q3'23 Q3'22 Q3'23 Q3'22 Q3'23 Diluted EPS Adjus
Slide 5: Upcoming Multifamily Wave of Maturities Drives Growth in Refinancing Opportunity
U P C O M I N G M U L T I F A M I L Y “ W AV E O F M A T U R I T I E S ” D R I V E S G R O W T H I N R E F I N A N C I N G O P P O RT U N I T Y Total Multifamily Loan Maturities (in billions) $129 $130 $127 $113 $109 $100 $98 $75 $49 $42 $32 $27 $25 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Slide 6: Rapidly Rising 10-Year Treasury Has Disrupted Transaction Activity
R A P I D LY R I S I N G 1 0 - Y E A R T R E A S U R Y H A S DISRUPTED TRANSACTION ACTIVITY $16,919 5.00% (volume in thousands) $16,000,000 $11,210 4.50% $8,555 $8,412 $12,000,000 $6,720 4.00% $8,000,000 3.50% $4,000,000 3.00% $- WD Total Transaction Volume U.S. 10-Year Treasury Rate 6 Source: Feder
Slide 7: Servicing & Asset Management (SAM)
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 ” ) Q3’23 KEY FINANCIAL METRICS YEAR-OVER-YEAR (in thousands) Q3’23 Q3’22 % Change Total Revenues $148,140 $129,322 15% Net Income $45,427 $30,923 47% Adjusted EBITDA1 $124,849 $106,281 17% • Ended Q3’23 with total managed portfolio of $146.
Slide 8: Capital Markets
C A P I TA L M A R K E T S Q3’23 KEY FINANCIAL METRICS YEAR-OVER-YEAR Q3’23 Q3’22 % Change (in thousands) Total Transaction Volumes $8,555,467 $16,919,208 (49%) Total Revenues $117,696 $188,540 (38%) Net Income $7,050 $36,463 (81%) Adjusted EBITDA1 ($15,704) $1,302 (1,306%) • Decline in total revenu
Slide 9: Corporate
C O R P O R AT E Q3’23 KEY FINANCIAL METRICS YEAR-OVER-YEAR (in thousands) Q3’23 Q3’22 % Change Total Revenues $2,907 ($2,251) (229%) Net Income ($31,019) ($20,553) 51% Adjusted EBITDA1 ($35,080) ($32,593) 8% • Strong growth in total revenues due to increase in interest income from our corporate cas
Slide 10: 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 2.32x Underwritten Loan-to-Value2 62% Fixed-Rate Loans3 91% Maturities Over Next 24 Months $3.2B Defaulted Loan
Slide 11: Recurring Revenues Support Strong Adjusted EBITDA Despite Market Challenges
R E C U R R I N G R E V E N U E S S U P P O RT S T R O N G ADJUSTED EBITDA DESPITE MARKET CHALLENGES YTD’23 Consolidated Key Performance Metrics Total Transaction Volumes Total Revenues Adjusted EBITDA1 (in millions) (in thousands) (in thousands) $52,129 $232,470 $975,903 $212,541 $780,104 $23,688 Y
Slide 12: Where We Are Going
WHERE WE ARE GOING GROW DEBT FINANCING VOLUME $60B+ Origination Volume / $5B+ Small Balance Loans / $160B Servicing Portfolio GROW PROPERTY SALES VOLUME $25B+ Sales Volume GROW INVESTMENT BANKING AND ASSET MANAGEMENT BUSINESSES $10B+ Assets Under Management ENVIRONMENTAL, SOCIAL AND GOVERNANCE Incre
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 Three months ended Three months ended Nine months ended Nine months ended (in thousands) % Variance % Variance September 30, 2023 September 30, 2022 September 30, 2023 Septembe
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 Three months ended Three months ended Nine months ended Nine months ended (in thousands), except per share amounts % Variance % Variance September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Walker & Dunlop Net Income $21
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 Three months ended (in thousands) September 30, 2023 September 30, 2022 Walker & Dunlop Net Income $7,050 $36,463 Adjustments: Income tax expense 2,386 12,468 Interest expense on corpo
Slide 17: Adjusted EBITDA Reconciliation to Net Income by Segment: Servicing and Asset Management
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 Servicing and Asset Management Three months ended Three months ended (in thousands) September 30. 2023 September 30, 2022 Walker & Dunlop Net Income $45,427 $30,923 Adjustments: Income tax expense 15,040 10,204 Interest
Slide 18: Adjusted EBITDA Reconciliation to Net Income by Segment: Corporate
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 Corporate Three months ended Three months ended (in thousands) September 30, 2023 September 30, 2022 Walker & Dunlop Net Income ($31,019) ($20,553) Adjustments: Income tax expense (benefit) (10,357) (15,140) Interest ex