Skip to content
    CBRE
    Earnings call· Dec 2025(Q4 FY25)

    CBRE GROUP Q4 FY25 earnings call CBRE

    Feb 12, 2026 Source

    Executive summary

    CBRE Group, Inc. Q4 FY25 — Record Revenue and Core EPS, Strong Data Center Growth

    CBRE concluded FY25 with record revenue and core EPS, driven by broad-based strength across resilient and transactional businesses, notably in data center solutions and global leasing. The company is strategically streamlining operations and investing in future growth, particularly leveraging AI for efficiency and data advantage. Management anticipates continued strong performance in FY26, with core EPS growth of 17% at the midpoint, supported by ongoing investments and market share gains.

    Highlights

    5

    • Fourth quarter revenue rose 12% with both resilient and transactional businesses delivering double-digit growth.

    • Core EPS increased 18% to reach its highest level ever for CBRE, with 2026 guidance of $7.30 to $7.60, representing 17% growth at the midpoint.

    • Data Center Solutions revenue grew more than 20%, expected to reach $2 billion in 2026, and accounted for approximately 14% of core EBITDA in 2025.

    • Leasing revenue grew 14% globally, with U.S. leasing up 12% and office leasing reaching record levels for the quarter and full year.

    • Free cash flow generated nearly $1.7 billion in 2025, reflecting 86% conversion on core net income, above the 75% to 85% target range.

    Concerns

    3

    • Project Management margins declined compared with the prior year due to unusual one-time expenses, though expected to reverse in Q1 2026.

    • Investment Management operating profit was impacted by lower incentive fees and co-investment returns compared to the prior year.

    • GAAP earnings were reduced by a noncash impact of the U.K. pension plan buyout and an increased reserve for fire safety remediation in the U.K. development business, totaling $279 million.

    Guidance & targets

    9
    CategoryTargetConfidence
    Core EPS
    $7.30 to $7.60
    high materiality
    High
    Resilient businesses revenue growth
    double-digit growth
    medium materiality
    High
    Transactional businesses revenue growth
    healthy growth
    medium materiality
    High
    Advisory segment SOP growth
    low teens
    medium materiality
    High
    BOE segment SOP growth
    mid-teens
    medium materiality
    High
    Project Management segment SOP growth
    low teens
    medium materiality
    High
    Real Estate Investments operating profit
    roughly match 2025 results
    medium materiality
    High
    Services segment SOP growth (Advisory, BOE, Project Management)
    double-digit growth
    medium materiality
    High
    Q1 Core EPS contribution to full year
    approximately 15%
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Advisory Services
    Continued double-digit growth in leasing and sales. U.S. office leasing reached record levels for the quarter and full year. Large office deals slipped into Q1 2026. U.S. sales driven by office and multifamily, still below prior peak. Mortgage origination supported by increased activity with debt funds and CMBS. SOP growth outpaced revenue, with incremental margins above 30% excluding lower escrow income.
    Leasing revenue growth globally: 14%EMEA leasing revenue growth: 29% (Continental Europe)EMEA leasing revenue growth: 16% (U.K.)U.S. leasing revenue growth: 12%U.S. data centers leasing revenue growth: >100%U.S. industrial leasing revenue growth: 20%U.S. office leasing revenue growth (Q4 YoY): low single digitsCapital Markets sales growth: high teensCommercial mortgage originations growth: high teensU.S. sales revenue growth: 27%Mortgage origination fees growth: >20%Loan volume growth: 23%SOP growth: 14%
    		————
    Building Operations and Experience (BOE)
    Revenue growth was driven by local facilities management, data center solutions and contributions from the Pearce Services acquisition. Segment operating profit outpaced revenue growth. Local Facilities Management showed notable strength in Western Europe and ongoing expansion in the Americas.
    Data Center Solutions revenue growth: >20%Local Facilities Management growth: mid-teensEnterprise facilities management growth: led by life sciences, health care, financial services
    		———operating profit grew 20%
    Project Management
    Delivered solid revenue growth underpinned by new real estate projects for hyperscalers in the U.S. and new infrastructure mandates in the U.K. public sector. Integration of Turner & Townsend and CBRE's Legacy business proceeding well. Delivered healthy operating leverage for the full year. One-time expenses expected to reverse in Q1 2026.
    		———margins declined compared with the prior year due to a few unusual onetime expenses.
    Real Estate Investments (REI)
    Investment Management operating profit was largely in line with expectations. Growth in recurring asset management fees was offset by lower incentive fees and co-investment returns than in the prior year. Embedded gains of about $900 million in the development portfolio.
    Capital raised in 2025: >$11 billionAUM at year-end: $155 billionAUM increase for the year: >$9 billion
    		———SOP showed strong growth, driven by the sale of data center sites in our development business.

    Operational metrics

    10
    Core EBITDA contribution from Data Center and Digital Infrastructure
    14%
    FY25

    Across 4 business segments.

    Free cash flow conversion on core net income
    86%above 75%-85% target range
    FY25

    Driven by strong development gains.

    Share buybacks
    >$1 billion
    YTD FY25

    Since beginning of 2025.

    Net leverage
    1.2x
    FY25
    Local business revenue (Americas)
    $800 millionfrom $330 million in 2021
    FY25
    Industrious locations
    >300up from ~200 at beginning of 2025
    FY26
    Traditional infrastructure revenue contribution to Project Management (Americas)
    <25%vs 25% rest of world
    FY25
    Q1 Core EPS contribution to full year
    15%larger than last year's Q1
    Q1 FY26
    Research cost savings from AI
    25%
    FY26-FY27

    Savings from using AI for data assimilation and delivery.

    Loan loss reserves
    $70 million
    Q4 FY25

    Increases steadily with loan book.

    Industry KPIs

    4
    MetricValueDetails
    Net debt adjusted EBITDA1.2xx
    Leasing bookings volume signed14%%
    Data center power land pipeline30+sites
    Ffo core ffo normalized ffo per share$7.30 to $7.60USD

    Orderbook & backlog

    2
    Embedded gains in development portfolio$900 millionQ4 FY25
    Data center land sites under control30+Q4 FY25

    Within Trammell Crow Company, with very little balance sheet investment.

    Deals & partnerships

    1
    Pearce Servicesacquisition$1.2 billion

    Acquisition closed in November 2025.

    Capital programs

    2
    Pearce Services acquisitionclosed$1.2 billion
    Start: November 2025

    Benefit: Expanded technical services capabilities in digital infrastructure market

    Part of over $1.5 billion capital allocated since Q3.

    Finance Transformation (ERP implementation, process standardization, organizational restructuring)underway
    Start: FY26

    Benefit: Improved functional platform and products

    Part of investments to support mid-teens EPS growth.

    Risks & headwinds

    5
    Project Management margin decline due to one-time expensesQ4 FY25

    margins declined

    Mitigation: expected to be entirely reversed in the first quarter [Q1 FY26]

    Lower incentive fees and co-investment returns in Investment ManagementQ4 FY25

    lower

    Noncash impact from U.K. pension plan buyout and increased reserve for U.K. fire safety remediationQ4 FY25

    $279 million

    Mitigation: Pension buyout will result in future net cash savings.

    Uncertainty in timing of data center land salesFY26

    difficult to predict

    Mitigation: This uncertainty drives the low end vs high end of the core EPS guidance range.

    Headwind from cash compensation related to strong 2025 performanceFY26

    headwind

    Q&A highlights

    6

    What's the pipeline for Capital Markets in 2026? How dependent is recovery on rate cuts?

    Management is not counting on rate cuts for 2026. The balance between asking and offering prices has closed, and capital is available. Expects slow, steady recovery with double-digit growth, not a rapid return to peak levels. Q1 started strong.

    “What we do see is that the demand between -- or the balance between asking prices and offering prices has closed. There is capital available, even though not more inexpensively materially than it was recently.”

    asked by Stephen Sheldon · answered by Robert Sulentic

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Investments and Growth Drivers

    CBRE is strategically investing in areas with secular tailwinds, such as digital infrastructure and data center solutions. The Pearce Services acquisition in November expanded technical services capabilities in the digital infrastructure market. The integrated Data Center Solutions business is projected to reach $2 billion in revenue in 2026, growing at 20% annually, and contributed approximately 14% of core EBITDA in 2025.

    02

    AI Strategy and Impact

    The company is leveraging AI for efficiency, aiming to save 25% of research costs over the next year, and to develop a knowledge advantage by better utilizing its vast real estate data. Management believes its transactional businesses (brokerage, investment) are protected from AI disruption due to the need for creativity, strategic thinking, and relationships. Physical asset creation and operation businesses are also seen as largely protected due to complexity and labor-intensive nature, with AI offering net benefits long-term.

    03

    Capital Markets Recovery

    While not expecting a rapid return to peak levels, CBRE anticipates another good year for sales and financing activity in Capital Markets. The balance between asking and offering prices has narrowed, and capital is available, leading to expected double-digit growth. The recovery is projected to be slow and steady, with Q1 FY26 showing a strong start.

    04

    BOE Segment Performance and Outlook

    The Building Operations and Experience (BOE) segment saw revenue growth driven by local facilities management, data center solutions, and Pearce Services. Local Facilities Management grew from $330 million in 2021 to $800 million in 2025, with global local margins slightly above the overall BOE segment. The company is proactively investing in BOE to sustain outsized growth, expecting flat margins in 2026 due to these investments, but anticipating continued margin expansion beyond 2026.

    05

    Project Management Integration and Margins

    The integration of Turner & Townsend and CBRE's Legacy Project Management business is proceeding well and is expected to be largely complete in 2026. Margins in Q4 FY25 declined due to one-time📎 expenses related to conservative provisioning for receivables on large projects, but these are expected to reverse in Q1 FY26, leading to margin expansion in the segment for the year.

    06

    Free Cash Flow and Capital Allocation

    CBRE generated nearly $1.7 billion in free cash flow in 2025, converting 86% of core net income, exceeding its 75%-85% target range due to strong development gains. The company allocated over $1.5 billion since Q3, including $1.2 billion for Pearce Services and nearly $400 million for share repurchases. Net leverage ended FY25 at 1.2 turns. For 2026, free cash flow conversion is expected to be within the 75%-85% range, with a headwind from 2025 cash compensation.

    AI-generated summary of the company’s earnings call. Not investment advice.