On November 1, 2023, Newmark Group Inc (NMRK, Financial), a leading commercial real estate adviser and service provider, released its financial results for the three and nine months ended September 30, 2023. The company reported a decrease in total revenues and GAAP net income compared to the same period in 2022.
Financial Performance and Challenges
According to the report, Newmark Group Inc (NMRK, Financial) recorded total revenues of $616.3 million in Q3 2023, a decrease of 7.3% from $664.6 million in Q3 2022. The GAAP net income for fully diluted shares also fell by 62.6% to $14.1 million from $37.7 million in the same period last year. The GAAP net income per fully diluted share dropped by 60.0% to $0.06 from $0.15.
Financial Achievements
Despite the challenges, Newmark Group Inc (NMRK, Financial) reported double-digit growth in its recurring businesses during Q3 2023. The company also declared a quarterly dividend of $0.03 per share, payable on December 6, 2023, to Class A and Class B common stockholders of record as of November 22, 2023.
Company's Outlook
CEO Barry M. Gosin commented on the company's performance and future outlook. He stated,
We significantly outperformed our full service peers in the record market of 2021, and also expect to outperform our peers in the challenging 2023 market. Our model has proven to be resilient and successful across the cycles, and we expect to continue outpacing the industry in the fourth quarter of 2023 by generating double-digit growth in revenues, Adjusted Earnings per share, and Adjusted EBITDA."The company also expects to produce full-year Adjusted EBITDA between $375 and $400 million and Adjusted Earnings per share of $1.02 to $1.09.
Key Financial Tables
The company's Adjusted Earnings before noncontrolling interests and taxes fell by 26.5% to $77.8 million from $105.8 million in Q3 2022. The Post-tax Adjusted Earnings to fully diluted shareholders also decreased by 22.5% to $65.9 million from $85.0 million in the same period last year. The Adjusted Earnings per share dropped by 22.9% to $0.27 from $0.35.
The company's recurring revenues from Management services, servicing fees, and other increased by 14.1% year-on-year in the third quarter. These businesses represented approximately 40% of Newmark's top line over the trailing twelve months, compared with 24% in 2017.
Analysis on the Company's Performance
The decrease in total revenues and GAAP net income indicates a challenging period for Newmark Group Inc (NMRK, Financial). However, the company's strategy of attracting and retaining top talent in the industry has resulted in significant market share gains in leasing and capital markets during the quarter. The company's resilience and successful business model have enabled it to outperform its peers despite the challenging market conditions.
For more detailed information, please visit the company's investor relations website at ir.nmrk.com.
Explore the complete 8-K earnings release (here) from Newmark Group Inc for further details.
