Slides
Page 1
N M R K . C O M Newmark Group, Inc. (Nasdaq: NMRK) First Quarter 2025 Financial Results Presentation April 30, 2025 Property Type: Office
Page 2
NEWMARK Discussion of Forward-Looking Statements References in this document to “we,” “us,” “our,” the “Company” and “Newmark” mean Newmark Group, Inc., and its consolidated subsidiaries. Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the Company's business, results, financial position, liquidity, and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K. Our expectations are subject to change based on various macroeconomic, social, political, and other factors. None of our long-term targets or goals beyond 2025 should be considered formal guidance. Non-GAAP Financial Measures This document contains non-GAAP financial measures that differ from the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United States ("GAAP"). See the sections of this document including, but not limited to, “Non-GAAP Financial Measures”, “Adjusted Earnings Defined”, “Reconciliation of GAAP Net Income to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and Taxes and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS”, and "Net Leverage", including any footnotes to these sections, for the complete and/or updated definitions of these and other non-GAAP terms and how, when and why management uses them, and the differences between results under GAAP and non-GAAP for the periods discussed herein. See also “Timing of Outlook for Certain GAAP and Non-GAAP Items” for a discussion of why it is difficult to forecast certain GAAP results without unreasonable effort. Other Items Investors may find the following information useful: (i) Throughout this document, certain other reclassifications may have been made to previously reported amounts to conform to the current presentation and to show results on a consistent basis across periods. Unless otherwise stated, any such changes would have had no impact on consolidated total revenues or earnings under GAAP or for Adjusted Earnings, all else being equal. Certain numbers in the tables or elsewhere throughout this document may not sum due to rounding. (ii) Rounding may have also impacted the presentation of certain year-on-year percentage changes. (iii) Decreases in losses may be shown as positive percentage changes in the financial tables. (iv) Changes from negative figures to positive figures may be calculated using absolute values, resulting in positive percentage changes in the tables. 2 Disclaimers
Page 3
NEWMARK Highlights of Consolidated Results (USD millions, except per share data) Total Revenues $665.5 $546.5 21.8% GAAP net income (loss) for fully diluted shares (8.8) (16.3) 46.1% GAAP net income (loss) per fully diluted share (0.05) (0.09) 44.4% Post-tax Adjusted Earnings to fully diluted shareholders ("Post-tax Adjusted Earnings") 54.3 37.4 45.2% Post-tax Adjusted Earnings per share ("Adjusted Earnings EPS") 0.21 0.15 40.0% Adjusted EBITDA ("AEBITDA") 89.2 63.5 40.5% 1Q25 1Q24 Change 1. Unless otherwise stated, “TTM” refers to the trailing twelve month ended 03/31/2025. Notes: (i) See the sections of this document including, but not limited to, “Non -GAAP Financial Measures”, “Adjusted Earnings Defined”, and “Reconciliation of GAAP Net Income (loss) to Common Stockholders to Adjusted Earnings before noncontrolling interests and taxes and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS”, including any footnotes to these sections, for the complete and/or updated definitions of these and other non-GAAP terms and how, when and why management uses them, and the differences between results u nder GAAP and non-GAAP for the periods discussed herein. (ii) The tax rate for Adjusted Earnings was 14.3% in the first quarter of 2025 compared with 15.0% a year earlier. Please see this quarter’s press release for more discussion on the Company’s tax rate. 3 - On April 29, 2025, Newmark's Board declared a qualified quarterly dividend of $0.03 per share payable on May 29, 2025, to Class A and Class B common stockholders of record as of May 14, 2025, which is the same as the ex-dividend date. - All of the year over year improvement was organic, as the Company made no acquisitions during the TTM1 ended March 31, 2025. Recent Consolidated Results
Page 4
NEWMARK 4 TTM Revenues +$2.8B 2024 Transaction Volume ~$1.1T Global Client Service Locations 165 $471.0MM of TTM Adjusted EBITDA & 1.3x net leverage as of March 31, 2025 Strong Earnings, Cash Generation & Low Leverage Acclaimed Industry Leader Top 4 U.S. Broker by Investment Volume (2024) #1 Office Broker (2024) #3 Cross-Border Broker (2024) #4 Apartment Broker (2024) #1 Multifamily Freddie Mac Lender: Student Housing (2025) #5 Multifamily Freddie Mac Lender: Conventional (2025) #5 Multifamily Freddie Mac Lender: Seniors Housing (2025) #1 Top Mortgage Banking and Brokerage Firms (2025) Top Global Public CRE Services Companies Notes: (i) Headcount and client service locations include independently-owned business partners. Excluding these business partne rs, we had nearly 7,600 employees in approximately 140 offices as of March 31, 2025. Our revenues and volumes are for Newmark company-owned offices only. (ii) Volume figure is the notional value of leasing, investments sales, mortgage brokerage, and GSE/ FHA origination transacted by the Company as well as the estimated value of all properties appraised by our V&A businesses in 2024. (iii) GSE lending rankings are based on disclosures by Fannie Mae regarding Multifamily Delegated Underwriting & Servicing Le nders and/or by Freddie Mac about conventional Multifamily Optigo® Lenders. Servicing ranking, when shown, is per the MBA. (iv) Adjusted EBITDA and net leverage are non-GAAP financial measures. See "Non-GAAP Financial Measures" and "Financial Tables and Reconciliations”. Professionals ~8,100 Founded in 1929, Newmark is a global leader in commercial real estate services, seamlessly powering every phase of the property life cycle #3 Fannie Mae Top DUS® Producers: Seniors Housing #4 Fannie Mae Top DUS® Producers: Overall #5 Fannie Mae Top DUS® Producers: Green Financing OVERALL MULTIFAMILY GSE LENDING Newmark was the #5 Lender for Fannie Mae and Freddie Mac combined CRE Finance Firms: #1 Office Originations (2024) #3 Total Originations (2024) #4 Originations as Intermediary (2024) #4 Fannie Mae Originations (2024) Leading Commercial Real Estate Advisor and Service Provider
Page 5
NEWMARK Total Revenues AEPS AEBITDA AEBITDA Margin $665.5M $0.21 $89.2M 13.4% 21.8% 40.0% 40.5% 179bps 1Q 2025 5 - Newmark's strong operating leverage drove increases of 40.0% in Adjusted EPS and 40.5% in Adjusted EBITDA on 22.8% fee revenue growth. - AEBITDA Margin expanded by 179 basis points to 13.4% versus 11.6% in the first quarter of 2024. - 1Q 2025 Capital Markets revenues grew by 32.7%, marking the sixth consecutive quarter of double -digit gains. - Newmark increased 1Q 2025 Capital Markets volumes by 62.5%. This reflected significant volumes improvement across every major property type, with the strongest growth in retail and office but also strong growth in multifamily and industrial. In the quarter, the Company more than doubled its U.S. investment sales volumes, and increased GSE/FHA origination volumes by 40%. In comparison, industry investment sales volumes grew by 18% in th e U.S., U.S. commercial and multifamily originations were up 42%, while industry GSE placement activity improved by 16%1. - Newmark further enhanced its capabilities, expanding its U.S. multifamily platform with the addition of the leading West Coas t investment sales and debt team. The Company also added to its healthcare and Valuation & Advisory practices, as well as its growing international operations. Note: See the accompanying excel supplement for more details on NMRK’s volumes. 1. Industry investment sales volumes are from Newmark Research, based on their analysis of historical revisions to MSCI sales data. MSCI' s preliminary figures suggest that U.S. volumes increased by at least 11%, or by 21% excluding portfolio and entity deals. U.S. commercial and multifamily originations are from Newmark Research, based on analysis of historical figures from the Mortgage Bankers Ass ociation ("MBA") and preliminary 2025 MSCI lending data. GSE data is based on placement activity report by Fannie Mae and Freddi e Mac. First Quarter Highlights
Page 6
NEWMARK - Management Services, Servicing Fees, and Other grew by 10.5% on a total revenue basis and by 9.5% on a fee revenue basis, the seventh consecutive period of strong year-on-year improvement. We generated strong organic growth across nearly all our recurring businesses, including V&A, Occupier Solutions (formerly known as GCS), Servicing & Asset Management, Underwriting and Due Diligence, Dedicated Staffing Solutions, as well as Lease Administration and Property Accounting. - The Company improved revenues from Leasing and Other Commissions by 31.0%, driven by strong double-digit growth in office and retail leasing volumes. - Fees from Commercial Mortgage Origination, net increased by 35.3%, while Investment Sales fees rose by 31.1%, both of which reflected strength across every major property type. Additionally, Newmark completed over $19 billion of Data Center Capital Markets transactions in the TTM. - Newmark increased total Capital Markets volumes by 62.5%. In comparison, overall industry investment sales volumes were up by 18% in the U.S., while overall U.S. Commercial and Multifamily originations increased by 42% and GSE originations grew by 16%1. $546 $665 1Q 2024 1Q 2025 21.8% $159 $208 1Q 2024 1Q 2025 31.0% $257 $284 1Q 2024 1Q 2025 10.5% 6 1Q 2025 Revenue Detail Note: Newmark's fee revenues grew by 22.8% to $560.2 million in the first quarter of 2025. See the quarterly Excel supplements on the Company's website for more rev enue details. Totals may not foot due to rounding. 1. Industry investment sales volumes are from Newmark Research, based on their analysis of historical revisions to MSCI sales da ta. MSCI's preliminary figures suggest that U.S. volumes increased by at least 11%, or by 21% excluding portfolio and entity deal s. U.S. commercial and multifamily originations are from Newmark Research, based on analysis of historical figures from the Mortgage Bankers Ass ociation ("MBA") and preliminary 2025 MSCI lending data. GSE data is based on placement activity report by Fannie Mae and Freddi e Mac. Management Services, Servicing Fees, & Other Leasing & Other Commissions Capital Markets 1Q 2025 Revenue by Business Management Services, Servicing Fees, and Other Leasing & Other Commissions Total Revenues $131 $174 1Q 2024 1Q 2025 32.7% Capital Markets 42.7% 31.3% 26.1%
Page 7
NEWMARK Limited Servicing & Asset Management 61.9%Special Servicing 1.4% Fannie Mae 17.6% Freddie Mac 14.5% FHA/Other 4.7% 7 - Newmark’s servicing portfolio generated $65.8 MM1, +10.0% Y/Y in 1Q 2025, of high-margin, recurring, and predictable revenue. Our growing portfolio provides stable and strong cash flow generation. - As of 03/31/2025, Newmark’s higher margin primary servicing portfolio1 was up 7.4% Y/Y to $68.5 billion, a Company record, while its weighted-average maturity was 5.4 years. - Our total servicing & asset management portfolio was up 7.1% YoY to a record balance of $186.4 billion. - Of the Fannie Mae1 and Freddie Mac loans in Newmark’s servicing portfolio, only ~6.0% will mature by the end of 2026 and ~94.0% will mature in 2027 or later. 1. Please see the section of this presentation titled “Other Useful Information” for more information on Newmark’s recent servicing business results. Newmark Fannie Mae/Freddie Mac Portfolio Maturities by Year Portfolio Composition as of 03/31/2025 Servicing & Asset Management Provides Long-term and Recurring, High-Margin Revenues $186.4 Billion 6.0% 18.7% 35.4% 39.9% 2025-26 2027-28 2029-30 2031+
Page 8
NEWMARK 81. Net Debt / TTM Adjusted EBITDA. Adjusted EBITDA and net leverage are non -GAAP financial measures. See "Non-GAAP Financial Measures" and "Financial Tables and Reconciliations”. 2. TTM Adjusted EBITDA / TTM Interest Expense. Credit Metrics as of 03/31/2025 $471.0 million TTM Adjusted EBITDA 1.3x Net Leverage Ratio as of 03/31/20251 8.0x Interest Coverage Ratio2 AS OF 03/31/2025, UNLESS OTHERWISE STATED ($ IN MILLIONS) Cash and Cash Equivalents $157.1 Interest Rate Maturity Senior Notes 7.50% 01/12/2029 $595.9 Credit Facility SOFR + 1.60% 04/26/2027 $175.0 Total Debt $770.9 Net Debt $613.8 Total Equity $1,559.9 - The balance sheet changes from year-end 2024 reflected $100.0 million of incremental borrowing under Newmark’s revolving Credit Facility, offset by cash used with respect to the hiring of revenue- generating professionals and normal seasonal first quarter movements in working capital. - The Company’s target is to maintain net leverage at or below 1.5x. No near-term debt maturities Strong Balance Sheet & Credit Metrics
Page 9
NEWMARK 9 1. Newmark shares credit losses on a pari passu basis with Fannie Mae. On average, Newmark and the industry have experienced very low net charge offs. 2. Note the following (i) Adjusted EBITDA and net leverage are non-GAAP financial measures. See "Financial Tables and Reconciliations“. (ii) Approximately 2/3 of GAAP and AE expenses over the last 3 fiscal years were variable, on average. 3. Defined as “Net cash provided by (used in) operating activities” under GAAP (“CFFO”) divided by Adjusted EBITDA or Post-tax Adjusted Earnings. See “Other useful information“ in this document and “Newmark Has A Proven Record of Strong Cash Flow Conversion” in our 1Q 2024 Financial Results presentation. 4. This refers to “Cash Generated by the Business”, which was $437.6 and $341.2 million in fiscal years 2024, and 2023, respectively. Please see the “Other useful information” section in the appendix for the definition of this term. From 2017 to 2024, Cash generated by the business averaged ~85% of Adjusted EBITDA. The above figures assumes the midpoint of our guidance and assumes a similar conversion ratio for this metric in 2025. 5. Growth investments include hiring revenue generating headcount and M&A. Cash is returned to shareholders via dividends, distributions, and/or repurchases/redemptions of shares/units. Maintenance investment is capital expenditures and renewals for revenue generators. Strong Financial Profile & Credit Metrics Strong Cash FlowLow Risk Intermediary – Capital-light model; we do not own real estate – Virtually no balance sheet risk1 – ~$186 billion loan servicing and asset management portfolio – ~2/3 of expenses are variable2 – Operates with investment grade credit metrics – 1.3x net leverage2 ratio as of 03/31/2025; long-term target remains ≤1.5x – Newmark has a history of strong Cash Flow Generation and Conversion3 Cash & Cash Equivalents $157 MM Undrawn Portion of Credit Facility $425 MM Strong Expected Cash Generation4 $375MM to $425MM Significant Expected Available Capital ~$1 Billion Our Strong Financial Position & Cash Generation Will Help Fuel Our Continued Growth Our long-term capital deployment targets are to: – Invest 50% to 60% of available capital in growth, Return 30% to 40% to shareholders, and Allocate 10% to 20% for maintenance investment5.
Page 10
NEWMARK 2017 2019 2021 2023 1Q 2025 TTM 10 We target growing total revenues for these service lines to over $2 billion within 5 years 227% Fees from these businesses have grown 227% between 2017 and the TTM 197% Total revenues for these businesses have expanded by approximately 197% over the same period, making these NMRK’s fastest growing service lines since our 2017 IPO Newmark produced the seventh consecutive quarter of strong year-on-year revenue growth for Management services, servicing, and other in 1Q 2025 We continue to organically expand these resilient businesses in areas including Servicing & Asset Management, Underwriting and Due Diligence, Dedicated Staffing Solutions, as well as Lease Administration and Property Accounting 39% $382 $624 24% of Total Revenues 32% 28% $916 $971 ($ in millions) ~16% & 18% respective total & fee revenue CAGRs Fees from management services, servicing, and other Pass through revenues 1. The Company uses the terms “Recurring” and “Resilient” interchangeably with respect to Management services, servicing, and other. Strong Growth in Management & Servicing Revenues1 40% $1,134
Page 11
NEWMARK 2017 2021 2022 2023 1Q 2025 TTM 11 Note: All peer percentage are based on reported 2024 total revenues, the last period for which all such data is available. The full service peers are U.S. tickers CBRE, CIGI, CWK, and JLL. Newmark’s Non-U.S. Revenue 0.9% of Total Newmark Revenues 7.1% 12.5% 4.5% ~56% revenue CAGR International Expansion Gives Newmark Significant Upside Potential Our full service U.S.-listed public peers generated ~29% to 47% of their revenues outside the U.S., which leaves significant upside for Newmark Our European expansion continues with the 4Q 2024 launch of our Capital Markets and Leasing businesses in Germany. We also recently attracted additional top talent in France, and the U.K. Newmark has also made key hires in Asia and looks to continue its expansion across verticals and geographies 12.9%
Page 12
NEWMARK 0 100 200 300 400 500 600 700 800 900 1,000 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Dollars in Billions CMBS Insurance Government Agency Bank Debt Funds U.S. Commercial & Multifamily Mortgage Maturities ($B) ~$1T of Outstanding CRE Debt is Potentially Troubled, $542B of this is Maturing in 2025-2027 12 Sources: Newmark Research and the MBA. Data from 2025 onward is based on the MBA’s 2024 loan maturities published in February 2025. 1. Newmark Research used the following methodology: The loans are marked -to-market using an average of cumulative changes in the Do w Jones REIT sector price indices, REIT sector enterprise value indices and Green Street sector CPPI. The $1T covers the 2025 to 2033 maturity period, of which Newmark Research estimates $542B matures between 2025-2027. This analysis excludes other property types included in the Trepp and MBA figures, such as hotel and healthcare. The Trepp and MBA data excludes loans for acquisitions, development, and construction, as well as loans collateralized by owner -occupied commercial properties. ~$2.1T - The MBA expects a record $957 billion of mortgage maturities in 2025 and ~$2.1 trillion by 2027. Of this $2.1 trillion, Newmark Research believes that ~25% are potentially troubled. We expect these maturities will eventually translate into higher sales and acquisition financing as owners and lenders address increased scrutiny and the potential for higher-for-longer interest rates. - We expect this to drive our capital markets business as borrowers will seek advice from providers like Newmark to: - Advise on a loan sale or property sale. - Advise with restructurings and/or recapitalizations. - Assist in finding new lenders. - We also expect this wall of maturities to drive demand for Newmark’s other services, including Leasing, Property Management, Valuation & Advisory, and Servicing. We Expect Record Quantities of Maturing Debt to Continue Driving Newmark’s Results
Page 13
NEWMARK 1.5% 3.3% 8.7% 9.8% Total market size of nearly $1 trillion: Expect Double-Digit Growth Over the Next 2 Years 13 Sources: MSCI, MBA, and Newmark Research as of 04/25/2025. Notes: The MBA and MSCI both exclude loan sales from their data. Investment sales market share is calculated by dividing NMRK’s U.S. volumes by MSCI U.S. investment sales volumes for all dat es shown. MSCI investment sales data excludes certain transactions due to, among other reasons, deals below a certain notional amount a nd client confidentially agreements. MSCI’s data may be revised at a later date. “NMRK Total Debt Volume” includes Newmark’s non-originated mortgage brokerage volume plus GSE/FHA origination volumes. NMRK’s debt market share are those volumes divided by MBA commerc ial/multifamily mortgage origination volumes. For periods such as 1Q 2025 and 1Q 2024, MSCI loan data may be modeled by Newmark Research in lieu of MBA data, and/or revised upwards later. Newmark’s volumes shown above only go back to 2015 because (i) it is as far back as the Company reported stand-alone financials results, (ii) We began acquiring the companies that made up ARA in 2 016, and (iii) our volumes include a full year of Berkeley Point only from 2015 onwards. Industry total debt volumes used for the purp oses of calculating market share include brokered and non -brokered debt. NMRK U.S. Debt Market Share NMRK U.S. Investment Sales Market Share FY 2015 TTM 1Q 2025 ~6x Since 2015 - Comparing 2015 to the TTM: - Newmark’s investment sales market share grew from 3.3% to 9.8% of total U.S. industry volumes and is up ~130bps YoY vs. TTM 1Q 2024. - Our total debt market share grew from 1.5% to 8.7% of total U.S. industry originations and is up ~190bps YoY vs. TTM 1Q 2024. - As a reminder, Newmark's origination business dramatically outpaced the industry in the year earlier period. In the first quarter of 2024, the Company’s Total Debt volumes were up 91.7%, and the MBA's Commercial/Multifamily index was roughly flat YoY. ~3x Since 2015 Newmark Has a Long-Term Track Record of Gaining Share in U.S. Capital Markets FY 2015 TTM 1Q 2025
Page 14
Outlook & Targets 14 Property Type: Multifamily
Page 15
NEWMARK Metric FY 2025 Outlook YoY Change FY 2024 Actual Total Revenues (millions) $2,900 - $3,100 6% - 13% $2,738.5 Adjusted Earnings Per Share $1.40 - $1.50 14% - 22% $1.23 Adjusted Earnings Tax Rate 14% - 16% 14.1% Adjusted EBITDA (millions) $495 - $545 11% - 22% $445.3 15 ‒ Newmark's guidance and targets are unchanged, but are largely dependent on the macroeconomic environment, which is difficult to predict considering ongoing uncertainty with respect to tariffs and interest rate volatility. This outlook assumes that industry leasing and capital markets activity continue to recover in 2025, and that the Company's Management and Servicing businesses generate further solid growth. ‒ The Company continues to target equity-based compensation equal to 7% to 9% of commission-based revenues over time, however, due to the $21.1 million of GAAP charges related to the exchange and redemption of units held by Newmark's former Chairman, Howard W. Lutnick, this figure may be slightly above the Company’s target in 2025. ‒ Newmark’s long term target for annual share count growth remains 2% or less. ‒ The Company's non-GAAP guidance excludes any proceeds of the previously disclosed settlement agreement with respect to the stockholder derivative litigation, which will be funded exclusively by insurance proceeds. NEWMARK 15 Please note the following with respect to Newmark's outlook: ( i) The proceeds from the settlement agreement will be paid to Plaintiffs’ counsel and the Company. The proceeds will be exclud ed from Adjusted Earnings and Adjusted EBITDA because they are considered to be non-recurring, which is consistent with Newmark's non -GAAP methodology. See the Company's filing on Form 8 -K filed on February 12, 2025 for additional details. (ii) The outlook for Adjusted Earnings taxes represents the absolute expected range of the rate. (iii ) The Company's 2025 outlook excludes the potential impact of any future acquisitions and assumes no meaningful changes in Newm ark's stock price compared with the closing price on April 29, 2025. (iv) The Company's expectations are subject to change based on various macroeconomic, social, political, and other factors. 2025 Outlook
Page 16
GAAP Financial Results Property Type: Various 16
Page 17
NEWMARK Three Months E nded March 31, Revenues: 2025 2024 Management services, servicing fees and other 283,893$ 256,934$ Leasing and other commissions 208,074 158,799 Capital markets 173,527 130,766 Total revenues 665,494 546,499 E xpenses: Compensation and employee benefits 399,512 328,195 Equity-based compensation and allocations of net income to limited partnership units and FPUs 74,346 51,443 Total compensation and employee benefits 473,858 379,638 Operating, administrative and other 153,977 137,943 Fees to related parties 9,570 7,541 Depreciation and amortization 46,358 43,975 Total non-compensation expenses 209,905 189,459 Total operating expenses 683,763 569,097 Other income, net: Other income, net 750 (14) Total other income, net 750 (14) Income (loss) from operations (17,519) (22,612) Interest expense, net (8,483) (7,220) Income (loss) before income taxes and noncontrolling interests (26,002) (29,832) Benefit for income taxes (10,053) (3,516) Consolidated net income (loss) (15,949) (26,316) Less: Net income (loss) attributable to noncontrolling interests (7,183) (10,062) Net income (loss) available to common stockholders (8,766)$ (16,254)$ Newmark Group, Inc. Condensed Consolidated Statements of Operations 17 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) See the following page for per share data.
Page 18
NEWMARK Three Months E nded March 31, Per share data: 2025 2024 Basic earnings per share Net income (loss) available to common stockholders (8,766)$ (16,254)$ Basic earnings per share (0.05)$ (0.09)$ Basic weighted-average shares of common stock outstanding 176,352 174,774 Fully diluted earnings per share Net income (loss) for fully diluted shares (8,766)$ (16,254)$ Fully diluted earnings per share (0.05)$ (0.09)$ Fully diluted weighted-average shares of common stock outstanding 176,352 174,774 Dividends declared per share of common stock 0.03$ 0.03$ Dividends paid per share of common stock 0.03$ 0.03$ Newmark Group, Inc. Condensed Consolidated Statements of Operations (continued) 18 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) ( UNDER GAAP)
Page 19
NEWMARK March 31, 2025 December 31, 2024 Assets Current Assets: Cash and cash equivalents 157,078$ 197,691$ Restricted cash 110,564 107,174 Loans held for sale, at fair value 848,044 774,905 Receivables, net 560,723 604,601 Receivable from related parties - 326 Other current assets 111,072 87,976 Total current assets 1,787,481 1,772,673 Goodwill 776,626 770,886 Mortgage servicing rights, net 508,587 517,579 Loans, forgivable loans and other receivables from employees and partners, net 866,233 769,395 Right-of-use assets 513,383 500,464 Fixed assets, net 158,963 166,729 Other intangible assets, net 61,127 64,468 Other assets 175,343 147,926 Total assets 4,847,743$ 4,710,120$ Liabilities, Redeemable Partnership Interest, and E quity: Current Liabilities: Warehouse facilities collateralized by U.S. Government Sponsored Enterprises 821,165$ 754,308$ Accrued compensation 362,008 448,183 Accounts payable, accrued expenses and other liabilities 575,007 577,940 Payables to related parties 6,212 - Total current liabilities 1,764,392 1,780,431 Long-term debt 770,941 670,673 Right-of-use liabilities 502,331 489,832 Other long-term liabilities 250,152 231,115 Total liabilities 3,287,816 3,172,051 E quity: 1,559,927 1,538,069 Total liabilities, redeemable partnership interest, and equity 4,847,743$ 4,710,120$ (1) Includes "redeemable partnership interests," "noncontrolling interests" and "total stockholders' equity." Total equity (1) Newmark Group, Inc. Condensed Consolidated Balance Sheets 19 (IN THOUSANDS) (UNAUDITED) (UNDER GAAP)
Page 20
NEWMARK Three Months E nded March 31, 2025 2024 Net cash provided by (used in) operating activities (179,404)$ (68,783)$ Net cash (used in) investing activities (5,444) (7,354) Net cash provided by (used in) financing activities 147,625 56,140 Net increase (decrease) in cash and cash equivalents and restricted cash (37,223) (19,997) Cash and cash equivalents and restricted cash at beginning of period 304,865 258,706 Cash and cash equivalents and restricted cash at end of period 267,642$ 238,709$ Net cash (used in) operating activities excluding loan originations and sales (1) (126,387)$ (101,263)$ The Condensed Consolidated Statements of Cash Flows are presented in summarized form. For complete Condensed Consolidated Statements of Cash Flows, please refer to Newmark's Annual Report on Form 10-Q for the quarter ended March 31, 2025, to be filed with the Securities and Exchange Commission in the near future. (1) Includes loans, forgivable loans and other receivables from employees and partners in the amount of $117.7 million and $161.1 million for the three months ended March 31, 2025 and 2024, respectively. Excluding these loans, net cash provided by (used in) operating activities excluding loan originations and sales would be $(8.7) million and $59.8 million for the three months ended March 31, 2025 and 2024, respectively. Newmark Group, Inc. Summarized Condensed Consolidated Statements of Cash Flows 20 (IN THOUSANDS) (UNAUDITED) (UNDER GAAP)
Page 21
NEWMARK Appendix 1: 21 Property Type: Office Additional Information on Newmark 21
Page 22
NEWMARK 22 - Newmark increased total Capital Markets volumes by 62.5% in 1Q 2025. This reflected gains across every major property type, particularly for retail and office, as well as for multifamily and industrial. The Company also increased GSE/FHA origination volumes by 40%. - In comparison, industry Investment Sales volumes grew by 18% in the U.S., U.S. commercial and multifamily originations were up 42%, while industry GSE placement activity improved by 16%1. Note: See the accompanying excel supplement for more details on NMRK’s volumes. 1. Industry investment sales volumes are from Newmark Research, based on their analysis of historical revisions to MSCI sales da ta. MSCI's preliminary figures suggest that U.S. volumes increased by at least 11%, or by 21% excluding portfolio and entity deal s. European investment sales data is based on preliminary MSCI figures. U.S. commercial and multifamily originations are from Ne wmark Research, based on analysis of historical figures from the Mortgage Bankers Association ("MBA") and preliminary 2025 MSCI lending data. GSE data is based on placement activity report by Fannie Mae and Freddie Mac. 1Q 2025 1Q 2024 % Change Newmark Volumes Fannie Mae $1,047 $835 25.3% Freddie Mac 878 556 57.9% FHA / Other 24 - NMF Total GSE/FHA Origination Volume $1,948 $1,391 40.0% Mortgage Brokerage & Debt Placement 8,249 6,050 36.4% Total Debt $10,197 $7,441 37.0% Investment Sales 12,730 6,668 90.9% Total Capital Markets $22,928 $14,109 62.5% Supplemental Debt Information Multifamily Debt 4,981 3,445 44.6% Other Debt 5,216 3,996 30.5% Total Debt $10,197 $7,441 37.0% Newmark V olumes ($ IN MILLIONS)
Page 23
NEWMARK As of March 31, 2025 Fully Diluted Shares (millions) Ownership (%) Class A owned by Public 137.3 53.6% Class A (former Executive Chairman) 13.3 5.2% Limited partnership units owned by employees1 49.6 19.4% Class A owned by employees 10.3 4.0% Other owned by employees 5.0 2.0% Partnership Units owned by Cantor 18.3 7.2% Class A owned by Cantor 1.0 0.4% Class B owned by Cantor 21.3 8.3% Total* 256.2 100% Fully Diluted Shares (millions) Ownership (%) Public 150.6 58.8% Employees 64.9 25.3% Cantor 40.7 15.9% Total* 256.2 100% *Figures may not sum due to rounding 231. In conjunction with the spin-off of Newmark, certain limited partnership units were distributed to employees of both Newmark and BGC. Over time, virtually all of the partners of Newmark are expected to only own units and/or shares of Newmark and virtually all of the partners of BGC are expected to only own units and/or shares of BGC. From 1Q 2018 onwards, partners of Newmark have been compensated with Newmark partnership units and partners of BGC have been compensated with BGC units and/or RSUs. The table below reflects a reclassification of certain share equivalents held by our former Executive Chairman into common shares held by the public Newmark Group, Inc. Fully Diluted Period-End Share Count Summary
Page 24
NEWMARK 24 Fee and non-fee revenues The Company’s total revenues include certain Management Services revenues that equal their related expenses. These revenues represent fully reimbursable compensation and non-compensation costs recorded as part of Newmark's Occupier Solutions ("OS", formerly known as Global Corporate Services) and Property Management businesses. Such revenues therefore have no impact on the Company's GAAP or non-GAAP earnings measures and may be referred to as "Pass Through Revenues". The amounts recorded as Pass Through Revenues are also recorded as "Pass through expenses". Newmark's Total Revenues also include non-cash gains with respect to originated mortgage servicing rights (“OMSRs”), which represent the fair value of expected net future cash flows from servicing recognized at commitment, net. Such non-cash gains may also be called "OMSR Revenues". Newmark may also refer to Pass through revenues and OMSR revenues together as “Non-fee revenues”, and the remainder of its total revenues as "Fee revenues". Management services, servicing fees, and other "Servicing and Other Revenues" may be called Newmark's "Servicing and Asset Management business" and includes loan servicing and asset management fees, as well as interest income on loans held for sale, escrow interest, and yield maintenance fees. "Management Services, Servicing, and Other" (which may also be referred to as "resilient businesses", "recurring revenues", "recurring businesses", "management and servicing", or "management businesses") includes all pass through revenues, as well as fees from Newmark's Servicing and Asset Management business, Occupier Solutions, Property Management, its flexible workspace platform, Valuation & Advisory, and other commercial real estate service lines including Consulting, Title and Escrow Services, and Underwriting & Due Diligence. "Fees from Management Services, Servicing, and Other" are revenues from all resilient businesses excluding Pass through revenues. Beginning in the first quarter of 2024, the portion of Spring11's revenues associated with its servicing and asset management portfolio were no longer reported under Management Services but were instead recorded as part of Servicing and Other Revenues for all periods from the first quarter of 2023 onwards. Spring11's remaining revenues are still recorded as part of Fees from Management Services, Servicing, and Other. This change in presentation had no impact on the overall line item Management Services, Servicing, and Other, or on the Company's consolidated results. Capital Markets "Fees from Commercial Mortgage Origination, net" includes origination fees related to Newmark's multifamily GSE/FHA business (which may be used interchangeably with "Loan originations related fees and sales premiums, net") and fees from commercial Mortgage Brokerage and Debt Placement. Beginning in the second quarter of 2024 and retrospectively, "Capital Markets" includes "Fees from Commercial Mortgage Origination, net, "Investment Sales", and OMSR Revenues. Leasing and Other Commissions Leasing and Other Commissions includes fees from landlord (or "agency") representation and tenant (or "occupier") representation. Commission-based Revenues Newmark's "commission-based" revenues include Leasing and Other Commissions, Fees from Commercial Mortgage Origination, net, Investment Sales, and Valuation & Advisory. This is because brokers and originators in these businesses (who together may be referred to as "producers") and revenue-generating Valuation & Advisory professionals earn a substantial portion, or all their compensation based on their production. Commission-based revenues exclude OMSR Revenues, because Newmark does not remunerate its professionals based on this non-cash item. Contractual Business "Contractual business”, which may be used interchangeably with "contractual services" or "contractual revenues", is defined as business for which the Company has a contract with a client that is generally for a year or longer. Contractual business, when quantified, includes all revenues related to landlord representation (or “agency”) leasing, loan servicing (including escrow interest income), outsourcing (including property management, facilities management, and asset management), and lease administration. It also includes certain fees under contract produced by the Company’s flexible workspace and tenant representation service lines. Additional details on current and historical amounts for certain of Newmark's revenues are available in the Company's quarterly supplemental Excel tables. Certain Revenue Terms Defined
Page 25
NEWMARK 25 Information on Newmark’s Recent Servicing Business Results Newmark produced $175.8 million in servicing fees during the twelve months ended March 31, 2025. In addition to servicing fees, the Company generated $100.1 million of other revenues, for a total of $275.9 million of servicing & other revenues. These include escrow interest, servicing and asset management fees, interest on loans held for sale, and yield maintenance fees. Multifamily mortgage servicing revenue is stable and recurring in part because of greater call protection versus single family mortgages, and because interest income moves in tandem with interest rates. Over 98% of the Company’s GSE loans include prepayment penalties. Starting in the first quarter of 2024, Newmark’s servicing fees also reflect Spring 11’s limited servicing and asset management business, retrospectively from the first quarter of 2023 onwards. Please see “Recurring Revenues” under “Certain Revenue Terms Defined” in the appendix for more information regarding Spring11’s servicing and asset management revenues. We believe that for the industry, commercial and multifamily servicing and asset management companies earn 40 to 50 basis points on their Fannie Mae servicing book, eight to 10 basis points on Freddie Mac loans, approximately 15 basis points for FHA loans, and 1 to 3 basis points for limited servicing. The fees for special servicing and asset management can vary depending on a variety of factors. Spring11’s portfolio currently earns closer to the low-end of the latter range but is targeting higher fees over time as it expands its offerings across special servicing and asset management. Limited servicing, special servicing, and asset management together generally produce higher profit margins than Newmark as a whole, but lower profit margins versus GSE/FHA primary servicing. We expect our overall portfolio to continue providing a steady stream of income and cash flow over the life of the serviced loans. Newmark’s agency risk sharing portfolio was $32.7 billion and its OLTV was 61% at 03/31/2025. Additionally, between 1999 and 1Q 2025, Berkeley Point’s risk sharing portfolio losses averaged under 2 basis points annually, which is meaningfully lower than the over 40 basis points that servicers typically earn per year. Therefore, Berkeley Point’s cumulative portfolio losses over the past 26 years were significantly less than the $275.9 million of revenues that our overall servicing portfolio generated over the 12 months ended March 31, 2025. Recent Notable Hires For additional information about key hires announced over the twelve months ended April 29, 2025, see press releases including: "Newmark Hires North American Industrial Advisory Experts Jeff Cecil and Sara Troy"; "Newmark Hires Paris Head of Office Leasing, Makes Additional Appointments"; "Newmark Expands Germany Presence, Naming Top Industry Leader Marcus Lütgering as Country Head to Drive Growth and Strategy"; "Newmark Adds Steve Williamson and Matthew Kang to UK & EMEA Capital Markets Team"; "Newmark Hires Evan Williams as Head of Affordable Housing Debt & Structured Finance, Expanding Client Service Offerings"; "Newmark Hires Bryan Beel as Valuation & Advisory Multifamily Specialty Practice Leader"; "Newmark Announces Valuation & Advisory has Opened in Singapore"; Newmark Hires Top Multifamily Advisors, Western U.S., Bolstering Investment Sales ; and "Newmark Appoints Justin Shepherd as Co-Head of U.S. Healthcare Capital Markets Team". Please also see additional releases and/or articles with respect to those whose hiring was announced over the same time period in the "Media" section of Newmark's main website. Other Useful Information
Page 26
NEWMARK 26 Recent Notable Transactions For additional information about certain notable business wins and/or transactions for which Newmark acted as an advisor, and which were announced thus far in 2025, please see press releases including: "Newmark Arranges $360M Sale of Two Park Avenue Office Tower"; "Newmark Arranges $2.3 Billion Construction Financing for 206 MW Build-to-Suit Data Center"; "Newmark Arranges Recapitalization of 14-Property Dallas-Fort Worth Self-Storage Portfolio for Hines and CubeSmart"; "Newmark Advises Blackstone in $4B Privatization of Retail Opportunity Investments Corp."; "Newmark Facilitates $450M Refinancing for Texas Tower, Trophy Class A Office High-Rise"; "Newmark Secures $275 Million Financing for Luxury Residential Development in New York, NY"; "Newmark Arranges $105 Million Sale of Skims Headquarters Office Building in Hollywood, California"; and "Newmark Arranges Sale of Five-Property, Nearly 1,250-Unit National Student Housing Portfolio". Cash Generated by the Business Cash generated by the business means "Net cash provided by (used in) operating activities excluding loan originations and sales", before the impact of cash used for "Loans, forgivable loans and other receivables from employees and partners" (which Newmark considers to be a form of investment, but which is recorded as part of Cash Flows from Operating Activities) and the impact of cash used with respect to the 2021 Equity Event. For more information, see the section of the Company's quarterly supplemental Excel tables titled "Details of Certain Components Of ‘Net Cash Provided By (Used In) Operating Activities’". Newmark and Industry Volumes and/or Data For Newmark: Mortgage Brokerage and Debt Placement volumes consists of all non-originated debt placement transactions. Investment Sales volumes consists of all equity advisory transactions. Multifamily Total Debt, when shown, consists of multifamily related Mortgage Brokerage, Fannie Mae, Freddie Mac, and FHA volumes. Total Debt includes all Mortgage Brokerage, Fannie Mae, Freddie Mac, and FHA volumes. All industry volume figures are preliminary unless otherwise noted. Please see the accompanying supplemental Excel tables and quarterly financial results presentation on the Company's investor relations website, as well as Newmark's most recent and forthcoming Quarterly Report on Form 10-Q and/or Annual Report on Form 10-K for more information with respect to volumes for Newmark and/or the industry and for other relevant industry and macroeconomic data. Other Items Investors may find the following information useful: (i) Throughout this document, certain other reclassifications may have been made to previously reported amounts to conform to the current presentation and to show results on a consistent basis across periods. Unless otherwise stated, any such changes would have had no impact on consolidated total revenues or earnings under GAAP or the Company's non-GAAP methodologies, all else being equal. Certain numbers in the tables or elsewhere throughout this document may not sum due to rounding. (ii) Rounding may have also impacted the presentation of certain year-on-year percentage changes. (iii) Decreases in losses may be shown as positive percentage changes in the financial tables. (iv) Changes from negative figures to positive figures may be calculated using absolute values, resulting in positive percentage changes in the tables. Other Useful Information (continued)
Page 27
NEWMARK Appendix 2: Additional Industry Information Property Type: Various 27
Page 28
NEWMARK 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023 Q1 2024 Q1 2025 Q1 Boston Chicago Los Angeles Manhattan San Francisco Washington, DC 1.0% 1.8% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3 Star (Costar Pro-Forma)* 4&5 Star (Costar Pro-Forma)* - Overall U.S. Office activity (as a percentage of inventory) increased for both 3-star and 4&5 Star properties, but by more for 4&5 Star properties, demonstrating a continued preference towards premier locations. - With the pipeline of new office construction dropping off dramatically after 2025, the ongoing enhancement of Class B office product, and the conversion of obsolete space into multifamily and other uses, we expect office fundamentals to continue to gradually improve. - Additionally, Office leasing activity in the U.K. (not shown) was up 25% YoY in 1Q 2025. 28Sources: CoStar, Newmark Research as of 04/18/2025. *Data is for the first quarter of 2022 through the first quarter of 2025 values used in four -quarter trailing calculation use CoStar pro-forma based on proprietary internal formula that estimates remaining leases not captured based on analysis of historical lea sing trends. Leasing Activity as a Percentage of Inventory* Leasing Activity by Market as a Percent of Inventory (4-Quarter Trailing)* Recent leasing activity has been more robust in Manhattan and San Francisco than in other gateway cities 3 Star ’10-’19 Avg. = 1.2% 4&5 Star ’10-’19 Avg. = 2.1% U.S. Office Activity is Strongest in Class A Properties
Page 29
NEWMARK Property Type: Retail, Mixed-Use 29 Appendix 3: Financial Tables & Reconciliations
Page 30
NEWMARK Non-GAAP Financial Measures NON-GAAP FINANCIAL MEASURES This document contains non-GAAP financial measures that differ from the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United States ("GAAP"). Non-GAAP financial measures used by the Company include "Adjusted Earnings before noncontrolling interests and taxes", which is used interchangeably with "Pre-tax Adjusted Earnings"; "Post-tax Adjusted Earnings to fully diluted shareholders", which is used interchangeably with "Post-tax Adjusted Earnings"; "Adjusted EBITDA"; and "Liquidity". The definitions of these and other non-GAAP terms are below. The Company has made certain clarifications of and/or changes to its non-GAAP measures, including “Calculation of Non-Compensation Expense Adjustments for Adjusted Earnings” that will be applicable for reporting periods beginning with the third quarter of 2023 and thereafter, as described below. Historically, Adjusted Earnings excluded gains or charges related to resolutions of litigation, disputes, investigations, or enforcement matters that are generally non-recurring, exceptional, or unusual, or similar items that that management believes do not best reflect Newmark’s underlying operating performance. To help management and investors best assess Newmark’s underlying operating performance and for the Company to best facilitate strategic planning, beginning with the third quarter of 2023 and thereafter, calculations of Adjusted Earnings will also exclude unaffiliated third-party professional fees and expense related to these items. Newmark has not modified any prior period non-GAAP measures, as it has determined such amounts were immaterial to previously reported results. ADJUSTED EARNINGS DEFINED Newmark uses non-GAAP financial measures, including “Adjusted Earnings before noncontrolling interests and taxes” and “Post-tax Adjusted Earnings to fully diluted shareholders”, which are supplemental measures of operating results used by management to evaluate the financial performance of the Company and its consolidated subsidiaries. Newmark believes that Adjusted Earnings best reflect the operating earnings generated by the Company on a consolidated basis and are one of the financial metrics that management considers when managing its business. As compared with “Income (loss) before income taxes and noncontrolling interests” and “Net income (loss) for fully diluted shares”, both prepared in accordance with GAAP, Adjusted Earnings calculations primarily exclude certain non- cash items and other expenses that generally do not involve the receipt or outlay of cash by the Company and/or which do not dilute existing stockholders, as well as certain gains and charges that management believes do not best reflect the underlying operating performance of Newmark. Adjusted Earnings is calculated by taking the most comparable GAAP measures and making adjustments for certain items with respect to compensation expenses, non- compensation expenses, and other income, as discussed below. CALCULATIONS OF COMPENSATION ADJUSTMENTS FOR ADJUSTED EARNINGS AND ADJUSTED EBITDA Treatment of Equity-Based Compensation under Adjusted Earnings and Adjusted EBITDA The Company’s Adjusted Earnings and Adjusted EBITDA measures exclude all GAAP charges included in the line item “Equity-based compensation and allocations of net income to limited partnership units and FPUs” (or “equity- based compensation” for purposes of defining the Company’s non-GAAP results) as recorded on the Company’s GAAP Consolidated Statements of Operations and GAAP Consolidated Statements of Cash Flows. These GAAP equity-based compensation charges reflect the following items: - Charges with respect to grants of exchangeability, which reflect the right of holders of limited partnership units with no capital accounts, such as LPUs and PSUs, to exchange these units into shares of common stock, or into partnership units with capital accounts, such as HDUs, as well as cash paid with respect to taxes withheld or expected to be owed by the unit holder upon such exchange. The withholding taxes related to the exchange of certain non-exchangeable units without a capital account into either common stock or partnership units with a capital account may be funded by the redemption of preferred units such as PPSUs. 30
Page 31
NEWMARK Non-GAAP Financial Measures (continued) - Charges with respect to grants of exchangeability, which reflect the right of holders of limited partnership units with no capital accounts, such as LPUs and PSUs, to exchange these units into shares of common stock, or into partnership units with capital accounts, such as HDUs, as well as cash paid with respect to taxes withheld or expected to be owed by the unit holder upon such exchange. The withholding taxes related to the exchange of certain non-exchangeable units without a capital account into either common stock or partnership units with a capital account may be funded by the redemption of preferred units such as PPSUs. - Charges with respect to preferred units. Any preferred units would not be included in the Company’s fully diluted share count because they cannot be made exchangeable into shares of common stock and are entitled only to a fixed distribution. Preferred units are granted in connection with the grant of certain limited partnership units that may be granted exchangeability or redeemed in connection with the grant of shares of common stock at ratios designed to cover any withholding taxes expected to be paid. The Company believes that this is an acceptable alternative to the common practice among public companies of issuing the gross amount of shares to employees, subject to cashless withholding of shares, to pay applicable withholding taxes - GAAP equity-based compensation charges with respect to the grant of an offsetting amount of common stock or partnership units with capital accounts in connection with the redemption of non-exchangeable units, including PSUs and LPUs. - Charges related to amortization of restricted stock units (“RSUs”), limited partnership units, restricted stock awards, other equity-based awards. - Charges related to grants of equity awards, including common stock, RSUs, restricted stock awards, or partnership units with capital accounts. - Allocations of net income to limited partnership units and FPUs. Such allocations represent the pro-rata portion of post-tax GAAP earnings available to such unit holders. The amount of certain quarterly equity-based compensation charges is based upon the Company’s estimate of such expected charges during the annual period, as described further below under “Methodology for Calculating Adjusted Earnings Taxes”. Virtually all of Newmark’s key executives and producers have equity or partnership stakes in the Company and its subsidiaries and generally receive deferred equity or limited partnership units as part of their compensation. A significant percentage of Newmark’s fully diluted shares are owned by its executives, partners, and employees. The Company issues limited partnership units, RSUs, restricted stock, as well as other forms of equity-based compensation, including grants of exchangeability into shares of common stock, to provide liquidity to its employees, to align the interests of its employees and management with those of common stockholders, to help motivate and retain key employees, and to encourage a collaborative culture that drives cross-selling and growth. All share equivalents that are part of the Company’s equity-based compensation program, including REUs, PSUs, LPUs, certain HDUs, and other units that may be made exchangeable into common stock, as well as RSUs (which are recorded using the treasury stock method), are included in the fully diluted share count when issued or at the beginning of the subsequent quarter after the date of grant. Generally, limited partnership units (other than preferred units) are expected to be paid a pro-rata distribution based on Newmark’s calculation of Adjusted Earnings per fully diluted share. Certain Other Compensation-Related Items under Adjusted Earnings and Adjusted EBITDA Newmark also excludes various other GAAP items that management views as not reflective of the Company’s underlying performance for the given period from its calculation of Adjusted Earnings and Adjusted EBITDA. These may include compensation-related items with respect to cost-saving initiatives, such as severance charges incurred in connection with headcount reductions as part of broad restructuring and/or cost savings plans. The Company also excludes compensation charges related to non-cash GAAP gains attributable to originated mortgage servicing rights (“OMSRs”) because these gains are also excluded from Adjusted Earnings and Adjusted EBITDA. OMSRs represent the fair value of expected net future cash flows from servicing recognized at commitment, net. 31
Page 32
NEWMARK Excluded Compensation-Related Items with Respect to the 2021 Equity Event under Adjusted Earnings and Adjusted EBITDA Newmark does not view the cash GAAP compensation charges related to 2021 Equity Event (the "Impact of the 2021 Equity Event") as being reflective of its ongoing operations. These consisted of charges relating to cash paid to independent contractors for their withholding taxes and the cash redemption of HDUs. These had been recorded as expenses based on Newmark's previous non-GAAP definitions, but were excluded in the recast non-GAAP results beginning in the third quarter of 2021 for the following reasons: – But for the 2021 Equity Event, the items comprising such charges would have otherwise been settled in shares and been recorded as equity-based compensation in future periods, as is the Company's normal practice. Had this occurred, such amounts would have been excluded from Adjusted Earnings and Adjusted EBITDA and would also have resulted in higher fully diluted share counts, all else equal. – Newmark views the fully diluted share count reduction related to the 2021 Equity Event to be economically similar to the common practice among public companies of issuing the net amount of common shares to employees for their vested stock-based compensation, selling a portion of the gross shares pay applicable withholding taxes, and separately making open market repurchases of common shares. – There was nothing comparable to the 2021 Equity Event in 2020 and nothing similar is currently contemplated after 2021. Accordingly, the only prior period recast with respect to the 2021 Equity Event was the second quarter of 2021. Calculation of Non-Compensation Expense Adjustments for Adjusted Earnings Newmark’s calculation of pre-tax Adjusted Earnings excludes GAAP gains or charges related to the following: – Non-cash amortization of intangibles with respect to acquisitions. – Other acquisition-related costs, including unaffiliated third-party professional fees and expenses. – Resolutions of non-recurring, exceptional or unusual gains or charges related to resolutions of litigation, disputes, investigations, or enforcement matters that are generally non-recurring, exceptional, or unusual, or similar items that that management believes do not best reflect Newmark’s underlying operating performance, including related unaffiliated third-party professional fees and expenses. – Non-cash gains attributable to OMSRs. – Non-cash amortization of mortgage servicing rights (which Newmark refers to as “MSRs”). Under GAAP, the Company recognizes OMSRs equal to the fair value of servicing rights retained on mortgage loans originated and sold. Subsequent to the initial recognition at fair value, MSRs are carried at the lower of amortized cost or fair value and amortized in proportion to the net servicing revenue expected to be earned. However, it is expected that any cash received with respect to these servicing rights, net of associated expenses, will increase Adjusted Earnings and Adjusted EBITDA in future periods. – Various other GAAP items that management views as not reflective of the Company’s underlying performance for the given period, including non-compensation-related charges incurred as part of broad restructuring and/or cost savings plans. Such GAAP items may include charges for exiting leases and/or other long-term contracts as part of cost-saving initiatives, as well as non-cash impairment charges related to assets, goodwill, and/or intangible assets created from acquisitions. 32 Non-GAAP Financial Measures (continued)
Page 33
NEWMARK Calculation of Other income (loss) for Adjusted Earnings and Adjusted EBITDA Adjusted Earnings calculations also exclude certain other non-cash, non-dilutive, and/or non-economic items, which may in some periods include: – Unusual, non-ordinary or non-recurring gains or charges. – Non-cash GAAP asset impairment charges. – Gains or losses on divestitures. – The impact of any unrealized non-cash mark-to-market gains or losses on “Other income (loss)” related to the variable share forward agreements with respect to Newmark’s receipt of the payments from Nasdaq, Inc. (“Nasdaq”), in 2021 and 2022 and the 2020 Nasdaq payment (the “Nasdaq Forwards”). – Mark-to-market adjustments for non-marketable investments. – Certain other non-cash, non-dilutive, and/or non-economic items. Due to Nasdaq’s sale of its U.S. fixed income business in the second quarter of 2021, the Nasdaq Earn-out and related Forward settlements were accelerated, less certain previously disclosed adjustments. Because these shares were originally expected to be received over a 15 year period ending in 2027, the Earn-out had been included in calculations of Adjusted Earnings and Adjusted EBITDA under Newmark's previous non-GAAP methodology. Due to the acceleration of the Earn-out and the Nasdaq Forwards, the Company now views results excluding certain items related to the Earn-out to be a better reflection of the underlying performance of Newmark’s ongoing operations. Therefore, beginning with the third quarter of 2021, other income (loss) for Adjusted Earnings and Adjusted EBITDA also excludes the impact of the below items from relevant periods. These items may collectively be referred to as the "Impact of Nasdaq". – Realized gains related to the accelerated receipt on June 25, 2021, of Nasdaq shares. – Realized gains or losses and unrealized mark-to-market gains or losses with respect to Nasdaq shares received prior to the Earn-out acceleration. – The impact of any unrealized non-cash mark-to-market gains or losses on “Other income (loss)” related to the Nasdaq Forwards. This item was historically excluded under the previous non-GAAP definitions. – Other items related to the Earn-out. Newmark's calculations of non-GAAP “Other income (loss)” for certain prior periods includes dividend income on its Nasdaq shares, as these dividends contributed to cash flow and were generally correlated to Newmark's interest expense on short term borrowing against such shares. As Newmark sold 100% of these shares between the third quarter of 2021 and the first quarter of 2022, both its interest expense and dividend income declined accordingly. 33 Non-GAAP Financial Measures (continued)
Page 34
NEWMARK 34 METHODOLOGY FOR CALCULATING ADJUSTED EARNINGS TAXES Although Adjusted Earnings are calculated on a pre-tax basis, Newmark also reports post-tax Adjusted Earnings to fully diluted shareholders. The Company defines post-tax Adjusted Earnings to fully diluted shareholders as pre-tax Adjusted Earnings reduced by the non-GAAP tax provision described below and net income (loss) attributable to noncontrolling interest for Adjusted Earnings. The Company calculates its tax provision for post-tax Adjusted Earnings using an annual estimate similar to how it accounts for its income tax provision under GAAP. To calculate the quarterly tax provision under GAAP, Newmark estimates its full fiscal year GAAP Income (loss) before income taxes and noncontrolling interests and the expected inclusions and deductions for income tax purposes, including expected equity- based compensation during the annual period. The resulting annualized tax rate is applied to Newmark’s quarterly GAAP income before income taxes and noncontrolling interests. At the end of the annual period, the Company updates its estimate to reflect the actual tax amounts owed for the period. To determine the non-GAAP tax provision, Newmark first adjusts pre-tax Adjusted Earnings by recognizing any, and only, amounts for which a tax deduction applies under applicable law. The amounts include charges with respect to equity-based compensation, certain charges related to employee loan forgiveness, certain net operating loss carryforwards when taken for statutory purposes, and certain charges related to tax goodwill amortization. These adjustments may also reflect timing and measurement differences, including treatment of employee loans, changes in the value of units between the dates of grants of exchangeability and the date of actual unit exchange, changes in the value of RSUs and/or restricted stock awards between the date of grant and the date the award vests, variations in the value of certain deferred tax assets and liabilities, and the different timing of permitted deductions for tax under GAAP and statutory tax requirements. After application of these adjustments, the result is the Company’s taxable income for its pre-tax Adjusted Earnings, to which Newmark then applies the statutory tax rates to determine its non-GAAP tax provision. Newmark views the effective tax rate on pre-tax Adjusted Earnings as equal to the amount of its non-GAAP tax provision divided by the amount of pre-tax Adjusted Earnings. Generally, the most significant factor affecting this non-GAAP tax provision is the amount of charges relating to equity-based compensation. Because the charges relating to equity-based compensation are deductible in accordance with applicable tax laws, increases in such charges have the effect of lowering the Company’s non-GAAP effective tax rate and thereby increasing its post-tax Adjusted Earnings. Newmark incurs income tax expenses based on the location, legal structure, and jurisdictional taxing authorities of each of its subsidiaries. Certain of the Company’s entities are taxed as U.S. partnerships and are subject to the Unincorporated Business Tax (“UBT”) in New York City. Any U.S. federal and state income tax liability or benefit related to the partnership income or loss, with the exception of UBT, rests with the unit holders rather than with the partnership entity. The Company’s consolidated financial statements include U.S. federal, state, and local income taxes on the Company’s allocable share of the U.S. results of operations. Outside of the U.S., Newmark is expected to operate principally through subsidiary corporations subject to local income taxes. For these reasons, taxes for Adjusted Earnings are expected to be presented to show the tax provision the consolidated Company would expect to pay if 100% of earnings were taxed at global corporate rates. CALCULATIONS OF PRE- AND POST-TAX ADJUSTED EARNINGS PER SHARE Newmark’s pre-tax Adjusted Earnings and post-tax Adjusted Earnings per share calculations assume either that: - The fully diluted share count includes the shares related to any dilutive instruments, but excludes the associated expense, net of tax, when the impact would be dilutive; or - The fully diluted share count excludes the shares related to these instruments, but includes the associated expense, net of tax ,when the impact would be anti-dilutive. Non-GAAP Financial Measures (continued)
Page 35
NEWMARK 35 The share count for Adjusted Earnings excludes certain shares and share equivalents expected to be issued in future periods but not yet eligible to receive dividends and/or distributions. Each quarter, the dividend payable to Newmark’s stockholders, if any, is expected to be determined by the Company’s Board of Directors with reference to a number of factors. Newmark may also pay a pro-rata distribution of net income to limited partnership units, as well as to Cantor for its noncontrolling interest. The declaration, payment, timing, and amount of any future dividends payable by the Company will be at the discretion of its Board of Directors using the fully diluted share count. For more information on any share count adjustments, see the table of this document and/or the Company’s most recent financial results press release titled “Fully Diluted Weighted-Average Share Count for GAAP and Adjusted Earnings.” MANAGEMENT RATIONALE FOR USING ADJUSTED EARNINGS Newmark’s calculation of Adjusted Earnings excludes the items discussed above because they are either non-cash in nature, because the anticipated benefits from the expenditures are not expected to be fully realized until future periods, or because the Company views results excluding these items as a better reflection of the underlying performance of Newmark’s ongoing operations. Management uses Adjusted Earnings and other financial metrics in part to help it evaluate, among other things, the overall performance of the Company’s business and to make decisions with respect to the Company’s operations. The term “Adjusted Earnings” should not be considered in isolation or as an alternative to GAAP net income (loss). The Company views Adjusted Earnings as a metric that is not indicative of liquidity, or the cash available to fund its operations, but rather as a performance measure. Pre- and post-tax Adjusted Earnings, as well as related measures, are not intended to replace the Company’s presentation of its GAAP financial results. However, management believes that these measures help provide investors with a clearer understanding of Newmark’s financial performance and offer useful information to both management and investors regarding certain financial and business trends related to the Company’s financial condition and results of operations. Management believes that the GAAP and Adjusted Earnings measures of financial performance should be considered together. For more information regarding Adjusted Earnings, see the sections of this document and/or the Company’s most recent financial results press release titled "Reconciliation of GAAP Net Income to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and Taxes and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS”, including the related footnotes, for details about how Newmark’s non-GAAP results are reconciled to those under GAAP. Non-GAAP Financial Measures (continued)
Page 36
NEWMARK ADJUSTED EBITDA DEFINED Newmark also provides an additional non-GAAP financial performance measure, “Adjusted EBITDA”, which it defines as GAAP “Net income (loss) available to common stockholders”, adjusted for the following items: – Net income (loss) attributable to noncontrolling interest. – Provision (benefit) for income taxes. – OMSR revenue. – MSR amortization. – Compensation charges related to OMSRs. – Fixed asset depreciation and intangible asset amortization. – Equity-based compensation and allocations of net income to limited partnership units and FPUs. – Various other GAAP items that management views as not reflective of the Company’s underlying performance for the given period. These may include compensation-related items with respect to cost-saving initiatives, such as severance charges incurred in connection with headcount reductions as part of broad restructuring and/or cost savings plans; charges for exiting leases and/or other long-term contracts as part of cost-saving initiatives; and non-cash impairment charges related to assets, goodwill and/or intangibles created from acquisitions. – Other non-cash, non-dilutive, and/or non-economic items, which may, in certain periods, include the impact of any unrealized non-cash mark-to-market gains or losses on “other income (loss)” related to the Nasdaq Forwards, as well as mark-to-market adjustments for non-marketable investments. – Interest expense. – The Impact of Nasdaq and the Impact of the 2021 Equity Event, (together, the "Impact of Nasdaq and the 2021 Equity Event"), which are defined above. 36 Non-GAAP Financial Measures (continued)
Page 37
NEWMARKNEWMARK 37 MANAGEMENT RATIONALE FOR USING ADJUSTED EBITDA Newmark’s calculation of Adjusted EBITDA excludes certain items discussed above because they are either non-cash in nature, because the anticipated benefits from the expenditures are not expected to be fully realized until future periods, or because the Company views excluding these items as a better reflection of the underlying performance Newmark’s ongoing operations. The Company’s management believes that its Adjusted EBITDA measure is useful in evaluating Newmark’s operating performance, because the calculation of this measure generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions. Such items may vary for different companies for reasons unrelated to overall operating performance. As a result, the Company’s management uses this measure and other financial metrics to evaluate operating performance and for other discretionary purposes. Newmark believes that Adjusted EBITDA is useful to investors to assist them in getting a more complete picture of the Company’s financial results and operations. Since Newmark’s Adjusted EBITDA is not a recognized measurement under GAAP, investors should use this measure in addition to GAAP measures of net income when analyzing Newmark’s operating performance. Because not all companies use identical EBITDA calculations, the Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, Adjusted EBITDA is not intended to be a measure of free cash flow or GAAP cash flow from operations, because the Company’s Adjusted EBITDA does not consider certain cash requirements, such as tax and debt service payments. For more information regarding Adjusted EBITDA, see the section of this document and/or the Company’s most recent financial results press release titled “Reconciliation of GAAP Net Income to Adjusted EBITDA”, including the related footnotes, for details about how Newmark’s non-GAAP results are reconciled to those under GAAP. LIQUIDITY DEFINED Newmark may also use a non-GAAP measure called “Liquidity”. The Company considers Liquidity to be comprised of the sum of cash and cash equivalents, marketable securities, and reverse repurchase agreements (if any), less securities lent out in securities loaned transactions and repurchase agreements. The Company considers Liquidity to be an important metric for determining the amount of cash that is available or that could be readily available to the Company on short notice. For more information regarding Liquidity, see the section of this document and/or of the Company’s most recent quarterly supplemental Excel tables titled “Liquidity Analysis”, including any related footnotes, for details about how Newmark’s non-GAAP results are reconciled to those under GAAP. NET LEVERAGE DEFINED Newmark may also use a non-GAAP measure called "net leverage.“ "Net debt", when used, is defined as total corporate debt (which excludes Warehouse facilities collateralized by U.S. Government Sponsored Enterprises), net of cash or, if applicable, total Liquidity, while "net leverage", when used, equals net debt divided by trailing twelve month Adjusted EBITDA. Non-GAAP Financial Measures (continued)
Page 38
NEWMARKNEWMARK 38 TIMING OF OUTLOOK FOR CERTAIN GAAP AND NON-GAAP ITEMS Newmark anticipates providing forward-looking guidance for GAAP revenues and for certain non-GAAP measures from time to time. However, the Company does not anticipate providing an outlook for other GAAP results. This is because certain GAAP items, which are excluded from Adjusted Earnings and/or Adjusted EBITDA, are difficult to forecast with precision before the end of each period. The Company therefore believes that it is not possible for it to have the required information necessary to forecast GAAP results or to quantitatively reconcile GAAP forecasts to non-GAAP forecasts with sufficient precision without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The relevant items that are difficult to predict on a quarterly and/or annual basis with precision and may materially impact the Company’s GAAP results include, but are not limited, to the following: - Certain equity-based compensation charges that may be determined at the discretion of management. - Unusual, non-ordinary, or non-recurring items. - The impact of gains or losses on certain marketable securities, as well as any gains or losses related to associated mark-to- market movements and/or hedging. These items are calculated using period-end closing prices. - Non-cash asset impairment charges, which are calculated and analyzed based on the period-end values of the underlying assets. These amounts may not be known until after period-end. - Acquisitions, dispositions, and/or resolutions of litigation, disputes, investigations, enforcement matters, or similar items, which are fluid and unpredictable in nature. Non-GAAP Financial Measures (continued)
Page 39
NEWMARK Three Months E nded March 31, 2025 2024 GAAP net loss available to common stockholders (8,766)$ (16,254)$ Benefit for income taxes (1) (10,053) (3,516) Net income attributable to noncontrolling interests (2) (7,183) (10,062) GAAP loss before income taxes and noncontrolling interests (26,002)$ (29,832)$ Pre-tax adjustments: Compensation adjustments: Equity-based compensation and allocations of net income to limited partnership units and FPU's (3) 74,346 51,443 Other compensation adjustments (4) 856 930 Total Compensation adjustments 75,202 52,373 Non-Compensation expense adjustments: Amortization of intangibles (5) 4,162 4,439 MSR amortization(6) 26,996 28,147 Other non-compensation adjustments (7) 4,619 3,911 Total Non-Compensation expense adjustments 35,777 36,497 Non-cash adjustment for OMSR revenues (8) (21,403) (16,144) Other (income) loss, net: Other non-cash, non-dilutive, and /or non-economic items and Nasdaq (9) (723) 13 Total Other (income) loss, net (723) 13 Total pre-tax adjustments 88,853 72,739 Adjusted E arnings before noncontrolling interests and taxes ("Pre-tax Adjusted E arnings") 62,851$ 42,907$ Reconciliation of GAAP Net Income Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests And Taxes And GAAP Fully Diluted EPS to Post-Tax Adjusted EPS 39 (in Thousands, Except per Share Data) (Unaudited) See the following page for a continuation of the table.
Page 40
NEWMARK Three Months E nded March 31, 2025 2024 GAAP Net loss available to common stockholders: (8,766)$ (16,254)$ Allocation of net loss to noncontrolling interests (10) (6,701) (9,113) Total pre-tax adjustments (from above) 88,853 72,739 Income tax adjustment to reflect adjusted earnings taxes (1) (19,041) (9,953) Post-tax Adjusted E arnings to fully diluted shareholders ("Post-tax Adjusted E arnings") 54,345$ 37,420$ Per Share Data: GAAP fully diluted earnings per share (0.05)$ (0.09)$ Allocation of net income to noncontrolling interests 0.00 0.00 Total pre-tax adjustments (from above) 0.35 0.28 Income tax adjustment to reflect adjusted earnings taxes (0.07) (0.04) Other (0.02) 0.00 Post-tax Adjusted E arnings per share ("Adjusted E arnings E PS") 0.21$ 0.15$ Fully diluted weighted-average shares of common stock outstanding 255,300 255,424 (1) Newmark’s GAAP provision (benefit) for income taxes is calculated based on an annualized methodology. Newmark includes additional tax-deductible items when calculating the provision (benefit) for taxes with respect to Adjusted Earnings using an annualized methodology. These include tax-deductions related to equity-based compensation, and certain net-operating loss carryforwards. The adjustment in the tax provision to reflect Adjusted Earnings is shown below (in millions): Reconciliation of GAAP Net Income Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests And Taxes And GAAP Fully Diluted EPS to Post-Tax Adjusted EPS (continued) 40 (in Thousands, Except per Share Data) (Unaudited) See the following page for a continuation of the table.
Page 41
NEWMARK 2025 2024 GAAP provision (benefit) for income taxes (10.1)$ (3.5)$ Income tax adjustment to reflect Adjusted Earnings 19.0 10.0 Provision for income taxes for Adjusted Earnings 8.9$ 6.5$ (2) (3) 2025 2024 Issuance of common stock and exchangeability expenses (i) 52.3$ 36.1$ Limited partnership units amortization 9.5 7.3 RSU amortization Expense 12.3 7.8 Total equity-based compensation 74.1$ 51.2$ Allocations of net income 0.2 0.2 Equity-based compensation and allocations of net income to limited partnership units and FPUs 74.3$ 51.4$ (i) 1Q2025 includes $21.1 million of GAAP charges related to the exchange and redemption of units held by Newmark's former Executive Chairman, Howard W. Lutnick. (4) (5) Includes Non-cash GAAP charges related to the amortization of intangibles with respect to acquisitions. (6) (7) 2025 2024 Lease expense (credits) related to liquidating entities 0.1$ (3.5)$ Asset impairments 6.3 3.3 Unaffiliated third party professional fees and expenses related to legal matters 1.5 1.3 Settlements (proceeds) from litigation (4.5) (0.1) Acceleration of debt issuance costs - 2.6 Fair value adjustments related to acquisition earnouts 1.2 0.3 4.6$ 3.9$ (8) (9) Includes $0.7 million of income related to the forfeiture of restricted Class A common stock for the three months ended March 31, 2025. (10) Excludes the noncontrolling portion of Newmark's net income in subsidiaries which are not wholly owned. Three Months E nded March 31, Three Months E nded March 31, The components of equity-based compensation and allocations of net income to limited partnership units and FPUs are as follows (in millions): Adjusted Earnings calculations exclude non-cash GAAP amortization of mortgage servicing rights (which Newmark refers to as “MSRs”). Subsequent to the initial recognition at fair value, MSRs are carried at the lower of amortized cost or fair value and amortized in proportion to the net servicing revenues expected to be earned. However, it is expected that any cash received with respect to these servicing rights, net of associated expenses, will increase Adjusted Earnings in future periods. Adjusted Earnings calculations exclude non-cash GAAP gains attributable to originated mortgage servicing rights (which Newmark refers to as "OMSRs"). Under GAAP, Newmark recognizes OMSRs equal to the fair value of servicing rights retained on mortgage loans originated and sold. Primarily represents portion of Newmark's net income pro-rated for Cantor and BGC’s employees ownership percentage and the noncontrolling portion of Newmark's net income in subsidiaries. Three Months E nded March 31, The components of other non-compensation adjustments are as follows (in millions): Includes compensation expenses related to severance charges as a result of the cost savings initiatives of $0.7 million and $1.4 million for the three months ended March 31, 2025 and 2024, respectively. Also includes commission charges related to non-cash GAAP gains attributable to OMSR revenues of $0.1 million and $(0.4) million for the three months ended March 31, 2025 and 2024, respectively. Reconciliation of GAAP Net Income Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests And Taxes And GAAP Fully Diluted EPS to Post-Tax Adjusted EPS (continued) 41 (in Thousands, Except per Share Data) (Unaudited)
Page 42
NEWMARK Three Months E nded March 31, 2025 2024 GAAP net Income (loss) available to common stockholders (8,766)$ (16,254)$ Adjustments: Net income (loss) attributable to noncontrolling interests (1) (7,183) (10,062) Benefit for income taxes (10,053) (3,516) OMSR revenue(2) (21,403) (16,144) MSR amortization(3) 26,996 28,147 Other depreciation and amortization (4) 19,362 15,819 Equity-based compensation and allocations of net income to limited partnership units and FPUs (5) 74,346 51,443 Other adjustments (6) 2,194 1,799 Other non-cash, non-dilutive, non-economic items and Nasdaq for Adjusted EBITDA (7) (723) 13 Interest expense (8) 14,432 12,238 Adjusted E BITDA ("AE BITDA") $ 89,202 $ 63,483 (1) (2) (3) (4) (5) (6) 2025 2024 Severance charges 0.7$ 1.4$ Assets impairment not considered a part of ongoing operations - 1.5 Commission charges related to non-GAAP gains attributable to OMSR revenues and others 0.1 (0.4) Fair value adjustments related to acquisition earnouts 1.2 0.3 Lease expense (credits) related to liquidating entities 0.1 (3.5) Acceleration of debt issuance costs - 2.6 2.2$ 1.8$ (7) (8) This represents gross interest expense related to corporate debt and amortization of debt issue costs. These expenses are included in "Interest expense, net" in the Consolidated Statements of Operations net against interest income on employee loans and bank deposits. Please refer to Footnote 9 under Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and Taxes and GAAP Fully Diluted EPS to Post-tax Adjusted EPS for additional information about the components of Other non- cash, non-dilutive, non-economic items. Non-cash gains attributable to originated mortgage servicing rights. Non-cash amortization of mortgage servicing rights in proportion to the net servicing revenues expected to be earned. Includes fixed asset depreciation and impairment of $15.2 million and $11.4 million for the three months ended March 31, 2025 and 2024, respectively. Also, includes intangible asset amortization related to acquisitions of $4.2 million and $4.4 million for the three months ended March 31, 2025 and 2024, respectively. The components of other adjustments are as follows (in millions): Three Months E nded March 31, Please refer to Footnote 3 under Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and GAAP Fully Diluted EPS to Post-tax Adjusted EPS for additional information about the components of "Equity-based compensation and allocations of net income to limited partnership units and FPUs". Primarily represents portion of Newmark's net income pro-rated for Cantor and BGC employees ownership percentage and the noncontrolling portion of Newmark's net income in subsidiaries. Reconciliation of GAAP Income to Adjusted EBITDA 42 (in Thousands) (Unaudited)
Page 43
NEWMARK Newmark Group, Inc. Other Income (Loss) (in millions) (unaudited) Three Months E nded March 31, 2025 2024 Other items, net 0.7 — Other income (loss), net under GAAP 0.7 — To reconcile from GAAP other income, exclude: Other items, net (0.7) — Other income, net for Pre-tax Adjusted E arnings — — Newmark's Other income (loss), net under GAAP includes equity method investments that represent Newmark's pro rata share of net gains or losses and mark-to-market gains or losses on investments. For the three months ended March 31, 2025, the difference between GAAP and non-GAAP other income included $0.7 million of income related to the forfeiture of restricted Class A common stock. 43 Other Income (in Millions) (Unaudited)
Page 44
125 Park Ave. New York, NY 10017 t 212-372-2000 Deb Bergman t 303-260-4307 MEDIA CONTACT Jason McGruder Shaun French t 212-829-7124 INVESTOR CONTACT For more information: For additional insights from Newmark Research, please go to the following websites: nmrk.com/insights nmrk.com/services#capital-markets Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries (“Newmark”), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark’s comprehensive suite of services and products is uniquely tailored to each c lient, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform’s global reach with market intelli gence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. For the twelve mont hs ended March 31, 2025, Newmark generated revenues of over $2.8 billion. As of March 31, 2025, Newmark and its business partners together opera ted from 165 offices with approximately 8,100 professionals across four continents. To learn more, visit nmrk.com or follow @newmark. 44 Find out more about Newmark at the following sites: nmrk.com twitter.com/newmark linkedin.com/company/nmrk-cre ir.nmrk.com