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Mar 31, 2023
Newmark Q1 2023 Earnings Report
Newmark's financial performance declined due to lower transaction volumes and rising interest rates, but strategic investments and acquisitions position the company for future growth.
Key Takeaways
Newmark reported a decrease in revenue and earnings for the first quarter of 2023 compared to the previous year. The decline was attributed to lower transaction volumes in capital markets and leasing, impacted by rising interest rates. However, the company highlighted strategic investments in talent acquisition and the acquisition of Gerald Eve, which are expected to contribute to future growth. Newmark also secured a significant mandate to sell Signature Bank's loan portfolio.
Newmark's total revenue decreased by 23.2% year-over-year to $520.8 million.
GAAP net loss for fully diluted shares was $(0.06) compared to $0.00 in the prior year period.
Adjusted Earnings per share decreased by 58.3% to $0.15.
Newmark was awarded the mandate to sell the $60 billion Signature Bank loan portfolio.
Newmark
Newmark
Newmark Revenue by Segment
Revenue by Segment
Management Services, Servicing, and Other Revenue
CapyFin.comLeasing and Other Commissions Revenue
CapyFin.com Forward Guidance
Newmark expects to be near the low end of its full-year guidance range, assuming a rebound in industry-wide transactions in the fourth quarter of 2023. The company is ahead of schedule with its cost reduction target and anticipates realizing at least $35 million during 2023. The company expects full year 2023 fully diluted weighted average share count to be approximately flat to down 1% compared with 2022.
Positive Outlook
- The Company remains ahead of schedule with respect to its $50 million annualized fixed cost reduction target and anticipates realizing at least $35 million during 2023.
- The Company expects full year 2023 fully diluted weighted average share count to be approximately flat to down 1% compared with 2022.
- Assumes that the decline in industry-wide transactions will begin to rebound in the fourth quarter of 2023.
- The Company's full year outlook excludes the potential impact of additional share repurchases
- The Company's full year outlook excludes any material future acquisitions.
Challenges Ahead
- The Company expects to be near the low end of its full-year guidance range
- Total Revenues $2,500 - $2,700 million, reflecting a (8%) - 0% change YoY
- Adjusted EBITDA $425 - $510 million, reflecting a (17%) - 0% change YoY
- Adjusted Earnings Tax Rate ~14% - 17%
- The Company remains ahead of schedule with respect to its $50 million annualized fixed cost reduction target and anticipates realizing at least $35 million during 2023.
Revenue & Expenses
Visualization of income flow from segment revenue to net income