Newmark Group (NMRK) Q4 2022 earnings summary

Executive summary

• FY22 revenue was $2.706B, down from $2.906B in FY21; GAAP net income available to common stockholders fell to $83.3M from $750.7M, reflecting the prior-year Nasdaq-related gains and equity-event effects.

• Adjusted EBITDA was $510.7M for FY22 versus $597.5M in FY21; Q4 Adjusted EBITDA was $102.2M versus $225.4M.

• Higher interest rates and reduced credit availability slowed capital-markets activity in H2, while management services and servicing revenue excluding pass-throughs grew 18.3% for FY22.

Financial highlights

• FY22 revenue: $2.706B; operating income: $185.6M; consolidated net income: $112.5M; net income available to common stockholders: $83.3M.

• GAAP diluted EPS was $0.45 in FY22 versus $3.80 in FY21; Adjusted Earnings EPS was $1.49 versus $1.64.

• FY22 operating expenses were $2.422B versus $2.884B; compensation and benefits declined 15.0% to $1.555B, partly reflecting the prior-year 2021 Equity Event.

• FY22 cash from operations was $1.196B, or $261.5M excluding loan origination and sale activity; cash and cash equivalents were $233.0M at year-end.

Outlook and guidance

• Management expected U.S. investment-sales and mortgage-brokerage volumes to decline YoY through at least H1 2023, with recovery dependent on interest-rate stabilization and improved financing conditions.

• MBA forecast U.S. commercial and multifamily lending down 15% in 2023 and up 32% in 2024; management cited pent-up demand and expected market-share outperformance after activity rebounds.

• More than $2.5T of commercial and multifamily debt was expected to mature over five years, supporting refinancing, loan advisory, and restructuring opportunities.

• Near-term buybacks were expected to slow as capital was redirected toward hiring and acquisitions; management also planned continued investment in recurring-revenue businesses and international growth.