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    NMRK
    Earnings call· Jun 2026(Q2 FY26)

    NEWMARK GROUP Q2 FY26 earnings call NMRK

    Jul 29, 2026 Source

    Executive summary

    Newmark Q2 FY26 — Double-Digit Growth Across Segments and Strong Operating Leverage

    Newmark delivered another quarter of robust financial performance, marked by double-digit revenue growth across all key segments and significant operating leverage. The company maintained its full-year guidance, citing tougher second-half comparisons and transaction timing, while actively pursuing strategic M&A to expand its managed services and recurring revenue streams. Investments in talent and technology, including AI, are expected to drive continued market share gains and long-term growth.

    Highlights

    5

    • Total revenue increased 17% to $888.4 million, an all-time second quarter best.

    • Adjusted EPS grew 26% to $0.39.

    • Adjusted EBITDA increased 22.1% to $139.2 million, with margin improving by 65 basis points.

    • Achieved #2 ranking in overall U.S. investment sales for the first half of 2026, gaining market share.

    • Trailing 12-month adjusted free cash flow increased 71.6% to $391.1 million, representing 85.3% of adjusted earnings.

    Concerns

    3

    • Guidance for full-year 2026 remained unchanged despite strong Q2 results, due to tougher comps in H2 and timing uncertainty of large transactions.

    • Lower origination activity in Capital Markets partially offset growth, mainly due to significant transactions in the prior year quarter.

    • Office to multifamily conversions are a costly process, with recent incidents in NYC highlighting construction challenges.

    Guidance & targets

    4
    CategoryTargetConfidence
    Total revenues growth
    approximately 16%
    high materiality
    Medium
    Adjusted EPS growth
    approximately 19%
    high materiality
    Medium
    Adjusted EBITDA growth
    approximately 20%
    high materiality
    Medium
    Management and Servicing annual revenue
    more than $2 billion
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Management Services, Servicing and Other
    This segment achieved its fourth consecutive record quarter, driven by double-digit organic growth across recurring revenue businesses and recent acquisitions.
    		—17.7%——
    Leasing
    Achieved an all-time best second quarter, led by significantly higher office volumes in key markets like New York City, San Francisco Bay Area, and Los Angeles, alongside global footprint expansion.
    		—17.2%——
    Capital Markets
    Reflected a broad recovery across property types and U.S. investment sales, as well as talent-driven international growth. Growth was partially offset by lower origination activity compared to the prior year due to significant transactions in Q2 2025.
    		—16%——

    Operational metrics

    16
    Total revenues
    $888.4 millionup 17%
    Q2 FY26

    All-time second quarter best, compared with $759.1 million in prior year.

    Adjusted EPS
    $0.39up 25.8%
    Q2 FY26

    Compared with $0.31 in prior year.

    Adjusted EBITDA
    $139.2 millionup 22.1%
    Q2 FY26

    Compared with $114 million in prior year.

    Adjusted EBITDA margin
    65 basis pointsimproved
    Q2 FY26

    Improved on total revenues, slightly ahead of midpoint of full year guidance range.

    Total expenses
    16.6%up
    Q2 FY26

    Reflected commission and pass-through expense growth generally in line with related revenue improvement.

    Adjusted earnings tax rate
    14.7%vs 14% last year
    Q2 FY26

    Company's tax rate for adjusted earnings.

    Fully diluted weighted average share count
    251.9 millionroughly flat
    Q2 FY26

    Compared to a year ago.

    Cash and cash equivalents
    $259.7 million
    Q2 FY26 end

    Balance sheet item.

    Total corporate debt
    $867.3 million
    Q2 FY26 end

    Balance sheet item.

    Net leverage
    1x
    Q2 FY26 end

    Balance sheet item.

    Adjusted free cash flow as % of adjusted earnings
    85.3%
    TTM

    At the high end of target range of 65% to 85%.

    Total debt volumes
    26.7%up
    H1 FY26

    Year-on-year increase.

    Investment sales volumes
    64.8%up
    H1 FY26

    Year-on-year increase.

    Office to multifamily conversions under construction
    11 million
    Q2 FY26

    Inventory of conversions in progress.

    Affordable housing AMI (Section 8/LIHTC)
    90%
    Q2 FY26

    Relates to the 467-m program for converting office buildings, providing 25% affordable housing.

    Affordable housing AMI (Section 8/LIHTC)
    40%
    Q2 FY26

    Relates to the 467-m program for converting office buildings, providing 25% affordable housing.

    Industry KPIs

    6
    MetricValueDetails
    Leasing revenue growth17.2%%
    Free cash flow conversion85.3%%
    Property sales revenue growth16%%
    Development in process pipeline$19 millionUSD
    Mortgage origination loan servicingLower
    Resilient vs transactional revenue split17.7%%

    Orderbook & backlog

    1
    Office to multifamily conversions pipeline$19 millionQ2 FY26

    Value of projects in the pipeline for office to multifamily conversions in New York City.

    Deals & partnerships

    1
    RealFoundationsAcquisition to augment managed services and integrate into consulting practices.

    RealFoundations provides implementation and integration services for real estate software (Yardi, MRI), creating synergies and a more holistic solution for clients.

    Risks & headwinds

    5
    Tougher second-half comparablesH2 FY26

    Up 20% in H2 last year

    Mitigation: Management is taking a cautious approach to guidance, awaiting more data.

    Uncertainty in timing of large transactionsH2 FY26

    Pretty sizable transactions in the pipeline

    Mitigation: Management is monitoring the timing and will update guidance next quarter.

    Macroeconomic environmentNear-term

    Current macro environment

    Mitigation: Management is waiting for more data before adjusting guidance.

    Cost of office to multifamily conversionsOngoing

    Very costly process

    Mitigation: Advocating for government tax incentives to make conversions more feasible.

    Impact of interest rates on multifamily volumesOngoing

    Slowdown in a variety of markets

    Mitigation: Certainty in interest rates and secure spreads are helping the market to transact; focus on affordable housing and GSE business.

    What to watch in Q3 FY26

    4

    Full-year guidance update

    Next quarter
    CurrentUnchanged (Total revenue up ~16%, Adj EPS up ~19%, Adj EBITDA up ~20%)
    TargetPotential revision (upwards or downwards)

    Why it matters

    Indicates management's confidence in H2 performance and market conditions, impacting investment thesis.

    And given the current macro environment, we just thought we wanted to see a little bit more data, and we'll update you on that next quarter.

    Q&A highlights

    7

    How is the debt business performing given prior outsized transactions and upcoming maturities, and what's the outlook for quarterly cadence?

    The debt pipeline remains strong for the second half of the year, with significant maturities expected over the next three years. Last year's Q2 included a large $7 billion transaction, impacting year-over-year comparisons. There is a robust pipeline in data centers, digital infrastructure, and large office deals, supported by ample liquidity.

    “I would say our debt pipeline remains really strong through the back half of the year. Hard to say what it will be next year, but the market certainly has a significant amount of maturities over the next 3 years.”

    asked by Alexander Goldfarb · answered by Michael Rispoli

    2 min read5 chapters

    Detailed Narrative

    01

    Strong Segment Performance & Market Share Gains

    Newmark achieved double-digit year-on-year revenue growth across all segments, marking 11 consecutive quarters in Capital Markets, 8 in Management & Servicing, and 7 in Leasing. The company's Capital Markets segment saw a broad recovery and talent-driven international growth, leading to Newmark moving up to #2 in overall U.S. investment sales for the first half of 2026, demonstrating significant market share gains.

    02

    Strategic Investments and AI Integration

    The company is actively investing in recurring revenue businesses, international expansion, and talent to drive long-term growth. Management highlighted the advent of AI as a defining economic force and an accelerant to enhance professional productivity and deliver innovative client solutions, indicating a focus on leveraging technology for future growth.

    03

    Capital Allocation Strategy

    Newmark generated strong free cash flow, increasing 71.6% on a trailing 12-month basis to $391.1 million. The capital allocation strategy is shifting from share buybacks towards strategic M&A, particularly in the managed service sector. Acquisitions like RealFoundations are aimed at building a holistic client solution, creating synergies, and expanding recurring revenue streams, with a goal of achieving multiple expansion.

    04

    Multifamily and Data Center Opportunities

    Newmark is building a leading affordable housing platform, recognized as the #1 investment sales platform in this sector, benefiting from strong government focus on affordability. The data center financing pipeline remains robust, driven by the enormous need for compute and capital for hyperscaler and infrastructure transactions, with new avenues like neocloud and distributed power emerging.

    05

    Office Market Dynamics and Conversions

    The office leasing market is characterized by activity concentrated in A-quality assets, with B-assets undergoing amenitization to compete. Office-to-multifamily conversions are most robust in New York City, with 11 million square feet under construction and $19 million in the pipeline. This process helps repurpose obsolete office inventory and create housing, though it is costly and requires government tax incentives.

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