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Jun 30, 2023
Newmark Q2 2023 Earnings Report
Newmark's financial performance declined due to industry-wide headwinds, but management services and leasing showed resilience.
Key Takeaways
Newmark reported a decrease in total revenues and earnings for the second quarter of 2023 compared to the record revenues of the prior year. Fees from management services increased, and leasing revenues outperformed the industry. The company is focused on cost reductions and expects capital markets to drive future growth as interest rates stabilize.
Total revenues decreased by 22.4% year-over-year to $585.8 million.
GAAP net income per fully diluted share decreased by 84.6% to $0.04.
Adjusted EBITDA decreased by 54.3% year-over-year to $72.9 million.
Fees from management services, servicing, and other grew by 7.4% year-on-year.
Newmark
Newmark
Newmark Revenue by Segment
Revenue by Segment
Management Services, Servicing, and Other Revenue
CapyFin.com Forward Guidance
Newmark anticipates generating approximately $2.5 billion in total revenues and $425 million of Adjusted EBITDA in 2023. The company expects a tax rate of 14% and 17% for Adjusted Earnings and anticipates full year 2023 fully diluted weighted average share count being approximately flat compared with 2022.
Positive Outlook
- Anticipates generating approximately $2.5 billion in total revenues in 2023.
- Expects to produce $425 million of Adjusted EBITDA in 2023.
- Expects to realize at least $35 million during 2023 from cost reduction target.
- Anticipates full year 2023 fully diluted weighted average share count being approximately flat compared with 2022.
- Assumes that the decline in industry-wide transactions will begin to rebound near the end of 2023.
Challenges Ahead
- Guidance assumes that the decline in industry-wide transactions will begin to rebound near the end of 2023.
- Outlook excludes the potential impact of additional share repurchases.
- Outlook excludes any material future acquisitions.
- Results for its higher margin investment sales and mortgage brokerage business continue to be impacted by the rapid rise in interest rates.
- Newmark generated record second quarter 2022 revenues, which makes year-over-year comparisons more challenging.